As the number of machinery auctions increases across the country, prices for used combines remain strong. The data table on page 44 highlights auction prices for November 2017, and while not every combine sold on the high side, there are a few strong prices that jump off the page.
For example, a 2016 John Deere S680 with 531 engine hours sold for $282,000 at a Nov. 28 farm auction in north-central Iowa. That price is the second highest for a John Deere S680 sold in the U.S. in 2017.
That strong price for a John Deere S680 came one week after a 2016 Case IH 8240 with 362 engine hours sold for $322,000 at a farm auction in east-central Illinois. That’s $322,000 with no heads. The strong auction price sent me to our Machinery Pete website to compare with retail prices. My search found 79 Case IH 8240s for sale in 18 states. When I used our search filters to narrow the list to 2016 models, there were 20 matches, 17 of which were priced below $322,000 on dealer lots.
So why are we seeing strong auction prices for combines given the dynamics of the industry right now?
First, consider the timing, the month of November. I’ve said it before, but if I were to have a farm auction, it would be in November. I say that based on data going back to November 2007, which is when I started to see the trend of stronger sale prices during the month. The trend held in 2017, despite a late harvest across parts of the upper Midwest and a significant increase in the number of machinery auctions.
November auctions reward sellers because they are at the front of the line. Farmers are just starting to think about equipment needs for the coming year, which means prospective buyers pile in and prices inch up.
The other major factor behind recent strong combine auction prices is the time-tested truth that when things are tough, more focus shifts to the used equipment market, particularly equipment in good condition. Down time hurts efficiency, so if new isn’t an option that means dependable used equipment is a must.
So when a nice combine, such as the 2006 Case IH 2388 with 2,862 engine hours that sold at a Nov. 18 farm auction in southeast Illinois, comes along there can be intense buyer interest. The $91,500 sale price was the highest I’ve seen on that model in 25 months.
One final important factor to note, which is easily overlooked, is the number of used combines dealers have moved off their lots since 2014. As painful as the process has been, dealers have collectively worked down the excess inventory in the past four years. The level is more manageable now but there are still plenty of used combines and good deals, so call your local dealer.