Machinery Pete: History Points to Buying Opportunity

01:05PM Aug 05, 2019
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“Seems like 20 years ago we could afford a new combine.” This was a comment recently shared by a Top Producer reader. I thought I’d take a stab at addressing the topic. 
( AgWeb )

“Seems like 20 years ago we could afford a new combine.” This was a comment recently shared by a Top Producer reader. I thought I’d take a stab at addressing the topic. 

Yes, the price of new combines (and really all types of farm equipment) continue to move higher each year. I did a quick search on MachineryPete.com and found nearly 6,800 combines listed for sale. On the day I searched, nine combines were listed at more than $500,000, while another 136 were priced from $400,000 to $499,999. Wow.

I’ve tracked auction price data on all types of equipment for 30 years. The No. 1 trend has been simple to decipher: The ever-rising cost of new equipment tends to pull up the value of used equipment in good condition. We all know this to be true. Go to any machinery auction in any state, and what does the auctioneer say at some point? “Boys, I know it’s a big check, but what does a new one cost?”

Heads in the auction crowd nod up and down. A new one costs a lot.

But let’s get to our reader’s point about being able to afford a new combine 20 years ago. Guess what the highest auction price on a combine was in the year 2000? A 2000 model Case IH 2388 sold for $121,000 on July 12, 2000, in east-central North Dakota. Today, I’ve seen used combines sell at auction as high as $360,000 in the U.S. (with no heads).

The Good News? Your opportunity to own a good used combine today at a nice value might be increasing. Check out the table showcasing used values on John Deere S600 Series combines. 

Note the “Machinery Pete Ratio” column. I’ve been compiling this figure the past 15 years. It is the average auction price divided by the average dealer advertised price. I’ve found the historical norm for this ratio to fall around 71% to 76%. Pay attention to the ratio on the larger capacity John Deere S680 and S690 models. Both are in the 51% range. Also note the higher ratio on the S670 and S660 combines.

My takeaway? Smaller combines in good condition are in demand. Also interesting is how the current average dealer advertised price on John Deere S600 models is nearly equal the average auction price from five years ago. So John Deere S690’s average advertised price is currently $264,838, while the average auction price five years ago (2014) was $263,500. 

I would say the rest of 2019 is a great time to be a combine buyer. You’ll find good deals on the used side, as well as attractive financing and warranty protection on the new front.  


Read Greg’s updates on noteworthy auctions and machinery trends at AgWeb.com/machinerypete

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 and equipment for sale at upcoming auctions.