Sinking commodity prices. Trade war tariff news dominating the headlines. Bone dry in some parts of the country. Way too wet in others. Dairy woes continuing.
So, how are used farm equipment values holding up, Pete? Surprisingly well as I write this (July 10).
This truth continues to surprise most folks who ask me the question. Certainly, these are trying circumstances in the ag economy, but good-condition, used farm equipment is actually hanging in there pretty steady. That’s after a very strong period (November 2017 into early June 2018) that saw values on good-condition, used equipment actually rise a little bit.
How can that be?
Well, this is what I’ve always loved about the sometimes brutal honesty of hard auction sale price data. It doesn’t matter what I think, what you think or what anyone thinks an item is worth. Put it up for sale and we’ll all find out together what it’s judged to be worth on that day, in that area, in that condition.
As I’ve been doing for nearly 29 years, you just need to compare that fresh auction sale price to other similar items sold and see if the trend line points up or down. Since November 2017, the trend line on good condition used farm equipment has been steady to up a bit.
Proof In The Data. Consider a pair of recent farm auctions. On July 10, at a farm sale up in central Saskatchewan, a very sharp 1985 Versatile 936 4WD tractor with 6,416 hours sold for $64,000 CAD, which equates to $48,838 U.S. That is the highest auction price I’ve seen on a Versatile 936 4WD tractor in seven years and two months.
“Low hour, premium condition is the hot ticket,” says Brendan Kramer, auctioneer with Ritchie Bros., who conducted the auction.
Four days earlier, July 6, a farm auction in northwest Minnesota by the Steffes Group posted solid sale prices on more late-model farm equipment. Examples included a 2011 Case IH 9120 combine with 1,647 hours and 36" tracks selling for $182,000; a 2015 Case IH PD500 60' air drill with 3430 commodity cart for $166,000; and a 2015 Kwik Till HSD3425 34' vertical tillage tool for $46,000.
Not any back off in these hard cash auction sale prices that I can see, and that is in the face of the myriad negative ag news.
All these used equipment items I mentioned were in good to very good condition, exactly the type of machinery that has been in high demand since late 2017. If you go to the average-condition, used equipment, I’ve seen weakening prices and more “No Sales” on consignment auctions starting around mid-June 2018. That’s the same pattern I saw back in mid-2017.
I think the biggest driver behind the continued strength of buyer demand on good-condition, used farm equipment into July 2018 is the fact that from 2013 through 2017 so many folks did not buy new or update their equipment lines in any significant way. Sitting tight they were, understandably so. But a full five years down the road as 2018 rolled around, it simply was time, like it or not, for lot of folks to update their farm equipment.
What did they want, what do they continue to want, even in the face of sagging commodity prices and exhausting trade war tariffs news? The best condition used equipment they can find.
For more insights and photos from the auction in Saskatchewan, read Greg’s blog at bit.ly/AuctionBlogs
Greg Peterson is the most trusted name in farm equipment. Since 1989, he has worked with a network of 1,000 auction companies to track used equipment prices. His website, MachineryPete.com, features equipment listings from dealers across the country.