If you’re looking to acquire a used machine in the next few months, this episode of the “Moving Iron” podcast is for you.
Greg “Machinery Pete” Peterson and Casey Seymour have over 50 years of combined experience in the farm equipment industry. Over the decades, they’ve witnessed plenty of good and bad from buyers in the auction and secondary markets.
Here are a handful of tips they recommend buyers heed as they hit auctions and dealer lots this fall and winter:
- Keep a close eye on interest rates. In the recent past when interest rates were sub-3%, watching rate fluctuations wasn’t as critical as it is today with 7% and 8% interest rates. Those high rates add a lot of dollars to the final price tag you’ll end up paying out over the years when you finance a tractor or combine.
- Have cash on hand? Consider a higher down payment. High interest rates have a depreciating effect on equity in any high-value asset. One way to combat that is to increase your down payment. While 20% is normally the standard, you might consider going higher to 30% to 35% of the total cost of the machine.
- Use data from MachineryPete.com and trusted sources. Its fine to be emotional about your favorite college football program or your trusty old farm dog, but emotion in the buying process should be kept to a minimum. Use auction data on the specific model you’re targeting to avoid emotional overpays and stay within current market value.
- Get a handle on current machinery supply levels. How many used machines are sitting on dealer lots can have an effect on auction pricing. It’s basic supply and demand economics: if there are a lot of used machines of a particular make and model available on the secondary market, you can probably find a good deal on the auction circuit, and vice versa. You can even do your own unofficial research and take a spin past your local equipment dealer to see what’s on the lot.
- Know the trends. Q4 and Q1 of the new year are two time periods when you’re likely to find used equipment bargains because, other than in 2015 and last year, used machinery values often drop once fall harvest wraps up. It remains to be seen, however, if that trend continues.
“I think we’re going to start seeing the numbers fall off, which will push things forward a little bit, [just] supply and demand stuff,” Seymour says. “But between now and probably the first quarter of ’26, that’s going to be your best opportunity to buy a machine at a good value. I don’t think you’re going to be able to buy it any cheaper than right now.”
Commodities and Market Updates
Shawn Hackett, president and CEO of Hackett Financial Advisors, gave an update on recent movement within USDA’s corn and soybean yield projections and how that will affect crop futures. He sees an upper $4 corn market and upper $11 soybean market as appropriate projections moving forward.
And used equipment specialist Aaron Fintel, 21st Century Equipment, says he focuses on how much equity he will be able to realize and how marketable the used machine will be six months from now when making a purchase decision.
You can head on over to YouTube to watch the full episode. Please be sure to hit the “Thumbs Up” button to “Like” the video and click on the “Subscribe” button to get a notification when a new episode drops.
