At the 2015 National Farm Machinery Show, Greg Peterson, also known as Machinery Pete, shares with attendees how to be smart buyers and sellers moving into 2015.
According to Machinery Pete, the following six key factors have maintained high used equipment values.
- Years of strong farm income
- High/rising price of new equipment
- Tightly controlled production of new equipment
- Low number of machinery auctions
- Historically low interest rate levels
- Tax incentives for buyers….IRS Section 179
But many of those factors have changed, which has led to a softer market for some types of machinery, in particular.
“In August and September, auction prices dropped 15% to 25% on late model combines, four-wheel-drive tractors, high horsepower tractors, self-propelled sprayers and large planters,” Peterson says. “Brand and geography didn’t matter with this drop. And it wasn’t just wholesale auctions, but farm retirement auctions as well.”
Peterson says for the past seven years, auction prices increased in the fourth quarter. This wasn’t the case in 2014, but auction values remain steady and flat—which was above expected performance.
Overall, Peterson sees the market returning to a previous rhythm.
“If you are looking to buy, prices will likely remain soft after St. Patrick’s Day and into September. But the number of auctions will likely decrease,” he said. “And then, a key driver for the fourth quarter will be Congress acting on Section 179.”
As a seller, Peterson has this main piece of advice: personalize your equipment.
“This spring, get someone to capture cell phone video of you using your machinery in the field. Then, when you go to list that machine for sale, be sure to note that video footage is available,” Peterson says.
He adds that many folks are surprised by how powerful video, detail photos and maintenance records can be as selling tools.