"Sale prices will drop off here in 2014, right Pete?"
"We'll see," is always my reply. What I've been seeing the first week and a half of this new year is showing that values are holding very strong on the good condition used farm equipment items with bit of age on them.
Like the 2005 JD 8320 tractor with 1,754 hours pictured above sold for $146,000 on a Jan. 10, 2014 farm auction in west-central Illinois....$146,000 is the 2nd highest auction sale price I've ever seen on a JD 8320. The only higher sale price? $149,000 for a 2002 model with 1,054 hours sold on a September 1, 2012 farm auction in southwest Iowa.
Makes me think back to the August 11, 2012 farm retirement auction I covered up the road here in southeast Minnesota. This was the drought summer, but southeast Minnesota wasn't too bad off, compartively speaking. The USDA crop report had just come out the day before. The report sent commodity prices zooming upwards, so auction day was a very interesting mix with folks talking drought, but also rising prices. On the auction that day was a beautiful 2002 model JD 8320 tractor with only 820 hours. It sold for $143,000. Here's a pic:
Here's a Youtube video I shot at this 8/11/12 farm auction showing the JD 8320 sell for $143,000:
So if we chew on this for a moment, tells me the buyer demand for good condition lower hour used tractors with bit of age on them has really only strengthened vs. 18 months ago. That JD 8320 sold for $143,000 on the southeast Minnesota farm auction back in August 2012 only had 820 hours. The JD 8320 just sold for $146,000 on the west-central Illinois farm auction Friday had over double the No. of hours...1,754. And factor in the price of corn Friday vs. what the price was back on August 11, 2012.
Yet still, the 8320 sold for $3K more Friday on the Illinois sale.
More proof of what I'm talking about came yesterday on a small farm auction in east-central Iowa where this 1981 AC 7010 tractor with 3,210 hours sold for $12,000 (see pic below)...the highest auction sale price I've seen on an AC 7010 in over 15 years.
"But Pete, these prices will have to soften up here soon, right?"
We'll see. Stay tuned.