Machinery Trends: When and Where Affect Sales Value

Machinery Trends: When and Where Affect Sales Value

When you cover machinery auctions for 25-plus years like I have, firsts are hard to come by. But it was definitely a first at a farm auction I covered Dec. 19, 2014, in the little southeast Minnesota farming town of Blooming Prairie. 

It was the quantity and quality of machines for sale at this farm auction that make it noteworthy. There were five 24-row planters. All were Kinze 3700 models. Four were 2013 models, and one was a 2014 model. 

Wow. Obviously this wasn’t your average 1,000-acre, 1,500-acre or 5,000-acre farm operation. Nope, the operation had 30,000 acres spread over a wide area. 

This farm auction also had quite an array of multiple similar-model tractors, as in four John Deere 9330 four-wheel-drives and also four John Deere 9560RT track tractors. Again: Wow.

What The Numbers Say. What I found so interesting was that the tractors sold on the higher side versus recent comparable auction sale prices, while the five Kinze 3700 24-row planters didn’t set the world on fire. The John Deere 9330 four-wheel-drive tractors sold from $136,000 to $155,000 (with 1,880 to 3,450 hours), and the four John Deere 9560RT track tractors brought from $197,500 to $260,000 (with 1,153 to 2,150 hours).

See how the five 24-row Kinze 3700 planters sold in the accompanying data table. There are a couple of key features to zero in on when analyzing these and other recent sales of used 24-row planters. First, many models sold at auction from the last week of November through the third week of December 2014—in other words, the data are timely and fresh. The other key is auction type. A majority sold on what I call wholesale auctions, such as dealer inventory reduction auctions, online sales and regional consignment auctions.

Chew on these figures and the word that jumps out to me is opportunity. Implement dealers have way too many later-model, used 24-row planters on their lots. I first saw this buildup begin to take shape back in mid- to late-2009. 

Supply and demand is a tough rule to buck. It’s more like impossible. 

Four Key Factors. So here comes that word again—opportunity. Understand the realities at play here creating this buying opportunity:

1. Dealers have too many 24-row planters.

2. The number of machinery auctions looks to be higher in 2015 as older grain farmers hang ‘em up and lots more large wholesale auctions happen.

3. Section 179 write-off limit cascaded down to a very low level when the calendar flipped to 2015.

4. The Fed continues to talk about finally raising interest rates come mid-2015.

What do you suppose interest rate hikes would do to dealer groups’ collective motivation to move excess big-ticket items quickly off their used lots? It’ll open floodgates. Factor in that Machinery Pete’s data show auction prices tend to drift lower after mid-March into late summer. This all points to buying opportunity dead ahead.

An oversupply of used 24-row planters has kept sales prices from rising, as seen in these figures from a Dec. 19, 2014, farm auction in southeastern Minnesota. 


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