For 28 years, Greg Peterson has been tracking used equipment values since starting Machinery Pete. With an industry leading database of auction results and MachineryPete.com featuring listings from dealers across U.S., Peterson has a multi-faceted view of the used machinery market. The Machinery Pete data is also supplemented with Peterson’s travels to machinery dealerships and auctions visiting with leaders in the industry.
Right now, there are more than a handful of trends bubbling to the surface of the machinery market.
- Used combine sales are picking up. There are a number of dealers reporting stronger than expected sales of used combines as we near the end of 2017. “It’s particularly strong for the one model series and older,” Peterson says. “And it comes down to that farmers aren’t buying as much new machinery, but they still have to farm and have reliable equipment. So, they can see a benefit in buying a machine that is only four years old and take advantage of the new technology and improved efficiency.”
- Crop conditions push geographical variances. The local crop conditions are affecting both the dealer’s market as well as the auction market. “It was pronounced last year when some farmers harvested their best soybean crop ever, and I saw machinery sales at the dealerships be strong and auction results be strong. This year, it’s more pronounced in areas where we had double replant and drought—and those areas have some weaker used machinery values and less activity at the dealer,” Peterson says.
- 2017 could be the year of tracks. On September 19, a Case IH 550 Quad Trac with 917 sold for $233,000 at a farm auction in west-central Minnesota. “This is the highest price for this make and model in 21 months,” Peterson says. “And it’s just one example of what I’ve been seeing—there is an active buying pool of farmers seeking out tracked equipment.”
- The effect of lease returns is modest. In the past 5 years, leases were an incredibly popular option for both farmers and dealers, and now the time has come for those off-lease units to re-enter the market. Machinery Pete has been closely watching the effect, and can so far report that dealers have been increasingly aggressive to buy off lease in volume, and then turn that into a profit center for them. “Now, we are seeing dealers both large in scale and smaller in footprint hopping in, and the off lease units are still being absorbed at a good clip,” Peterson says.
- There are more farm auctions. “And this is picking up quickly, even in the past 10 days,” Peterson says. “And November and December are going to be busy.” A driver in this uptick is more farmers are ready to retire. Peterson now hears the common theme of “Time to stop the equity drain” when listening to folks discuss upcoming auctions. With the increased supply of used machinery via the auction route, Peterson also reports so far the market has been able to absorb it without a decline in overall values.
- Condition is king. “We’re seeing an increase in the number of machinery auctions, but despite the increased supply of items up for auction, those in very good condition are holding their values or even getting premium prices,” explains Peterson. “However, if an item is just in average condition, those auction prices are trending lower.”
- In general, smaller is hotter. Peterson explains that there is more buyer demand for smaller equipment. This includes low horsepower tractors, which are experiencing stronger dealer sales and strong auction price results. “In general, the smaller scaled equipment is holding its value better,” he says. A 2012 Case IH Maxxum 140 with 501 hours and a loader set a new record pirce on September 7 at a farm auction in north-central Iowa. At a consignment sale in Ohio on September 1, a Kubota M135GX set record price of $56,000.