This week, Machinery Pete takes us on a trip down to Oklahoma, where he tracked “a bunch of good sales” over the last week, including his Pete’s Pick of the Week winner:
Last Wednesday, at a sale in Waukomis, Okla., a 2019 Case IH WD2104 swather with only 330 hours sold for $128,100, which Pete says is a new record high for that model. The previous record price was $107,200.
Pete also notes a 2021 Case IH Maxxum 150 tractor with a loader (700 hours) sold for $123,900 in the same auction. That’s the sixth highest auction price of all time for that make/model, he says.
“I think the (high) price of (a) new (swather) has probably made that pretty attractive,” Pete says. “And sometimes people buy new stuff — it might be for tax reasons, who knows — and they kind of drift for a couple years and don’t use it that much, knowing that when they do have their retirement sale that low hour stuff holds its value tremendously.”
Also of note last week in the Sooner State was a Big Iron Auctions farm retirement sale near Forgan, Okla. A trio of well-maintained, high-hour machines caught Pete’s attention there:
A 2012 John Deere 8360R tractor with 8,079 hours sold for $106,250. Pete says that’s the highest auction price “by a mile” he can find on a tractor with more than 8,000 operating hours.
A 2016 John Deere S670 combine with 28,106 engine hours sold for $80,750.
A 2017 John Deere R4038 sprayer with 23,101 hours sold for $116,500.
“Even though these all had higher hours, the farmer who owned them, Max Huling, obviously he took tremendous care of his equipment,” Pete says. “So, whether it’s low hours or higher hours, if you take great care of your stuff, it pays off when it comes time to sell it.”
The Machinery Pete Ratio Explained
Pete crunched the latest numbers at MachineryPete.com to show where used combine and tractor prices sit today in relation to his Machinery Pete Ratio theory.
The Machinery Pete Ratio is a metric Pete came up with to show that the price of a well-conditioned, late-model, used machine at auction should usually fall roughly between 70% to 75% of the dealer advertised price for the same machine brand new. If the ratio is too high, the price of used is inflated. And if it’s too low, the seller is not getting full market value.
Today, Pete says, the average auction price on a used John Deere S780 combine is $250,781, and the average dealer advertised price on a brand-new one is almost $433,000. That’s 60% less that the buyer has to spend to buy the used S780, on average, than it costs to get one brand new. That’s a good deal for the buyer, but the dealer on the other side of the deal might think they are leaving extra money on the table.
For comparison, the average auction price today on a used John Deere 8R 410 tractor is $334,578 while the average dealer price for new is $450,430. That’s a 76% ratio, which falls slightly over the target zone established by the Machinery Pete Ratio.
That metric would tell you if you’re a dealer and you have an excess inventory of used 8R 410 tractors cluttering up your lot now, it might be a good time to move some to the auction market. Or, if you’re a farmer looking for a bargain on a used 8R 410, you might think about waiting to see if the average auction price drops.
“It does look like prices are dropping, the key question now is we just passed June 1, which for me, that’s the buoy in the water,” Pete explains. “It’s when dealers take a collective breath, because customers have seed in the ground, and there’s five months on the books (in 2025) and they go, ‘Ok, how are we sitting on our used inventory, and what are our plans for the rest of the summer and fall to work this down?’ Last year, we saw an avalanche of dealers pushing stuff into the used auction market. This year, I don’t know if we’ll see as big of a push. I don’t think we will, but there’s going to be a lot of stuff that does get pushed. So again, tractors have a little more room to adjust downward, I think.”
Upcoming Auctions to Watch
Pete will be keeping his eyes focused on a pair of auctions this week.
On Tuesday, the folks at Del Peterson Auctions (DPA) will kick off their monthly online auction for June. There’s a 2024 Case IH TV620B skid steer with super low hours (15.6) listed in that sale.
On June 26, in Merritt, Iowa, there is a Zomer Company Realty & Auction farm retirement sale for Joe and Diana Rota that features nice, late-model used Case IH farm equipment.
