Recently I talked with two dealer groups, one red, one green; one in the western Plains, the other in the eastern Corn Belt. For the past 18 months, they’ve been working hard to pare down inventory—to the tune of $30 million off the books,according to the eastern dealer group. Now, the dealerships are looking to be aggressive buyers in the used market.
Certainly not all dealers are down to bare bones used inventory levels, and there’s still a lot of late-model iron for sale. But more dealers are selling what’s on their lots and looking for buying opportunities. Farmers should also be on the lookout for good buys this year. It’s a great chance to upgrade to late-model used equipment.
Sullivan Auctioneers sold a 2012 Landoll 7431 29' vertical tillage tool for $52,500 at a dealer auction in west-central Nebraska on Sept. 23, 2015.
One sector of the used equipment market that has been under pressure the past few years is large late-model tillage tools. But recently I’ve seen some movement.
For example, the amount of search traffic in the dealer equipment listings section at MachineryPete.com (with more than 99,000 equipment listings, updated daily) saw a significant spike during January 2016 on several tillage tool categories.
Traffic in the vertical tillage category jumped 56% in January 2016. For quite some time, auction prices on good used vertical tillage tools have also been solidifying. Check out the accompanying data table below. Here are some highlights:
- A small 26' Case IH 330 True Tandem sold for $39,000 at a north-central North Carolina farm auction on March 15, 2014.
- A 34' Case IH 330 True Tandem brought $50,000 at a consignment auction in east-central Arkansas on Feb. 20, 2015.
- A 2013 model John Deere 2623VT 40'8" model sold for $77,500 at a farm auction on Sept. 18, 2014, in northeast South Dakota. Note the date. Mid-September 2014 was a “soft” period for auction prices on most large late-model used equipment, but that didn’t seem to affect this sale.
“We have seen strong demand for used vertical tillage tools for the past year,” says Jim Sullivan, auctioneer with Sullivan Auctioneers in Hamilton, Ill. “Vertical tillage tools might be hurting the conventional disk market, though. A pass with a vertical tillage tool in the fall leaves options for the spring, depending on the weather.”
Tillage tools were a hot item on www.MachineryPete.com as evident by traffic in January 2016 versus December 2015.
For the three month period of November 2015 through January 2016, two of the top 10 most searched tillage items at MachineryPete.com were vertical tillage tools, the Case IH True Tandem 330 Turbo (No. 4) and the Landoll 7431 VT Plus (No. 9). The top two most searched tillage items during the same three-month span? A pair of John Deere field cultivator models, the 980 and 2210.
As I mentioned before, used tillage tool values overall have been softening the past couple years. Proof can be found looking at John Deere 980 field cultivators. The average auction price in 2015 for John Deere 980s was $9,459, which was down 15% from the prior year’s average of $11,123. Also in 2015, we saw a 20% jump in the number of John Deere 980 field cultivators sold at auction versus 2014.
I see 2016 as a year of opportunity as dealers continue to work down late-model used inventory levels and the number of machinery auctions continue to trend higher.
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