Every three months I review more than a dozen machinery categories to compare how used values track over time. Looking back at the planting category in the first half of 2014, there are divergent trends emerging based on equipment type, size and age. Although planting season is in
the books for the year, the segment demands a closer inspection.
I formally report the shifts in the various machinery categories in the "Machinery Pete Used Values Index," which is released once a quarter. The used values index is based on all of the auction price data I’ve compiled throughout the U.S. and Canada for the past 25 years. My rating scale ranges from 1 to 10, with 6.0 being stable or showing normal used values.
What’s hot. In the first three months of 2014, the planter category received a 7.0 rating, which is slightly above normal but certainly not red hot. The 7.0 rating is unchanged from fourth quarter 2013 and is down from the recent high of 7.6 in the third and fourth quarters of 2011.
Take note: In addition to planters, the planting category for my index includes drills, no-till drills, air seeders and seed tenders. Because of the assortment in the category, it’s important to dig deeper.
If the category was solely drills, my index rating would be markedly higher at more than 8.0.
In the first five months of 2014, there was strong bidding action on no-till drills and older smaller grain drills. See the table below that details strong auction prices on John Deere 750 no-till drills.
For more than a year now, older smaller used grain drills in good condition have been hot items on the auction market. I recall standing at a March 5, 2013, farm auction in north-central Iowa, when an older but very nice John Deere 8300 12' grain drill with grass seed attachment was up for bid. I wasn’t really paying attention until the bidding crept toward $6,000 and I scrambled into position to shoot video. The drill eventually sold for $8,000, a new record high price for a John Deere 8300 drill at the time. It blew well past the previous record of $6,200 on a BigIron.com online auction Aug. 8, 2012 (the drill was in Oklahoma).
The March 5 sale price kept the record-high spot for less than nine months. At a Nov. 30, 2013, farm auction in southwest Iowa another very nice John Deere 8300 12' drill sold for $8,300.
Strong buyer demand continued into 2014. For example, a nice John Deere 8300 12' grain drill with grass seed attachment sold for $7,700 at a March 27, 2014, farm auction in northeast Wisconsin. The seller bought the drill a decade ago from a dealer for less than half the sale price—$3,000. That’s not a bad return on investment.
Since late 2011, buyer demand has also been hot for six-row used planters in nice condition. Recent examples include three John Deere 7000 six-row planters that sold in early 2014 for $8,000 to $8,100 and seven John Deere 1750 six-row planters that sold at auction for $26,000 to $32,500 since late October 2013.
Where the road forks. As mentioned earlier, the trends in the planter category take an about-face when newer larger used planters take their turn on the auction block.
In my "Used Values Index" quarterly report, the index rating for larger planters slid lower throughout 2008 then flattened from 2009 until the second half of 2011 at 6.5. Back then, the rating drop and stagnation can be linked to a growing oversupply of used late model 24-row planters on implement dealer lots. The original owners were trading in the planters, and dealers were having a hard time finding a second buyer.
Then and now. So how have values on used 24-row planters been holding up the past year or so? The table on the next page shows the oversupply issue on dealer lots lingers.
Pay close attention to the "Type" column of the table, which lists whether the planters sold via an online, farm or consignment auction. Most were sold via dealer, consignment or online auctions by dealers struggling to reduce the inventory sitting on their two, five or 10 or more used lots. The minority of these units were sold at farm retirement or estate auctions.
Location, location, location. For farmers, there’s another takeaway to point out in this data. When it comes to 24-row planters, used values can and do vary based on auction type. More often than not, farm retirement and estate auctions produce the highest prices.
Of the seven 2007 model John Deere 1770 24-row planters listed in the table, the two highest sellers, $82,500 in west-central Nebraska and $97,200 from north-central Iowa, both sold at farm auctions.
The last item in the table, the 2012 John Deere 1770, sold for $159,000 at a farm auction. I was at that northeast Iowa sale filming for the weekly "Machinery Pete TV" show on RFD-TV. The bidding was hot on the planter despite the -20° below wind chill on that frigid December day.
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Don’t pass up an opportunity. Here we are seven months later. In the past couple of years, the summer has been a great time to buy a used 24-row planter for a good price. I think that might well hold true again this year.
In particular, buying opportunities are likely to abound at the large dealer, consignment and online auctions that are trying to move access inventory. As I write this column I’m eyeballing a large consignment auction in Indiana less than a week off. This sale features six John Deere 1770 24-row planters.
It’s one thing to find buyers for six gravity wagons at one auction. But it’s quite another to sell six late-model 24-row planters. The bargains on these machines are likely to ensue, so be on the lookout.