Market Forces Shift Who's Buying

December 12, 2015 02:24 AM

A look back at 2015 to gauge what’s in store for the coming year 

The more things change, the more they stay the same. For the most part, that statement holds true for the 2015 machinery market, but a pair of trends did develop:

  • More buyer interest in used livestock equipment
  • Delayed buyer reaction to negative news but almost immediate reaction to positive news

As grain prices began to drop in spring 2013, livestock farmers slid in the buyer’s seat. By January 2014, used livestock equipment values were responding. Buyer demand remained strong until November 2015. A shortage of used livestock equipment, such as small to midsized tractors and skid steers, on dealer lots urged prices higher. 

On the auction trail this past year, a 2011 John Deere 7230 tractor (135 hp) with 727 hours, mechanical front-wheel drive and no loader sold for $95,600 via an online consignment auction on Sept. 24 in west-central Minnesota. That’s a record high auction price for that model without a loader. At a southeast Minnesota farm sale on Nov. 7, a Case IH 600 forage blower sold for a record $7,000.

The trend is even more dramatic with used skid steers, which started to climb in value in 2013. For example, a 2010 John Deere 328D with 556 hours sold for $32,000 at a Nov. 19, 2015, dealer auction in southeast Nebraska. That’s the second highest auction price I’ve seen for that skid steer model.

As 2015 comes to a close and volatility sneaks back into the livestock market, demand for used livestock equipment remains strong. After a two-year buying spree, it’s going to take awhile for livestock producers to react to the negative outlook and pull back their bullish buying habits. 

When there’s good news circulating, regardless of how shortlived, buyers react almost instantly. Case in point: When the price of corn unexpectedly shot up for a short time in late June and early July, the effect was immediate. I talked to several people at a huge custom harvester absolute auction in Nebraska on July 1 who came expecting bargains on the one-year-old John Deere combines and tractors. There were no bargains, though. The same scenario played out at six more auctions during the same two weeks.

A new year is right around the corner. It’s always a good idea to look back to gauge where we’re going. 

For the past three years, sales of larger used tractors continued to trend downward in parallel with grain prices. Sales of small and midsized tractors and skid steers have been steady or higher as livestock producers spent money. 


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