Machinery Pete: Some Perspective on Expansion

January 27, 2016 02:14 AM
Machinery Pete: Some Perspective on Expansion

The question often comes up, “What is the best way to expand your farming operation?” My answer is: Have two pairs of glasses. 

Let’s call your first pair of spectacles long-term-view glasses, which are the most important pair, I think. You know you have these if you have a stated goal of growing your farm operation over time.

Now, it’s time to switch to your short-term-view glasses. Before you put them on, though, you need to have a little truth talk with yourself. What you’ll see through these lenses won’t always be pretty. There are bumps in the road, with more to come. 

Toggle back to your long-term-view glasses and you’ll remember where you want to wind up. Now train yourself to think of tough times as opportunities.

Opposites Produce Results. What I’ve described, of course, is the theory of opposites. When everyone is zigging, it’s time for you to zag. This theory of opposites works for any market and, yes, even the used-farm-equipment market.

The advantage you have over your father, grandfather or previous farming generations is the amount and availability of trusted, updated-on-the-fly, fantastic data and information. It can help you know when trend lines are turning and, therefore, the right times to act.

This is why I’ve devoted the past 26-plus years of my life to compiling auction sale data. 

Used Combine Trends. Let’s zero in on used combines. The chart below shows how combine values fell from a rating of 6.6 (on a rating scale of 1 to 10) in the fourth quarter of 2013 down to 5.9 by the third quarter of 2014, according to my Machinery Pete Used Values Index quarterly report. 

The rating leveled off and actually rose a bit to hold at 6.3 during mid-2015. Then came December. Our data showed softening prices on combines, resulting in the lower rating of 6 in the fourth quarter. December became a great time to buy used combines and other large machines. This year will be great for buyers, too. 

There are two points I’ll leave you to chew on:

1. If you are selling machinery, strive to have what everyone wants, not what every other seller has. What do folks want? They want used machinery in good condition with a little age and low hours. 

2. If you are buying, shoot for the two-way buy. 
Consider buying anything if it’s a bargain and you can use it, then come out great selling or trading.

You will save money over the years with these tactics on your way to a successful, growing farm. 

Combine Values Dip
Sale prices on used combines fell from a rating of 6.3 to 6during the fourth quarter of 2015. Those softening values made December a great time to be a buyer of large equipment.

In the market for used equipment? Check out the all-new Machinery Pete marketplace. Shop for used machines from across the country and search more than 92,000 listings for free, using innovative tools for farmers and dealers. Visit

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