Volatile is the word that best sums up the current state of the farm equipment auction world.
The market currently sits at a “tipping point” as the busy auction season approaches, according to “Moving Iron” podcast hosts Casey Seymour and Machinery Pete. One of the surest signals of an unsteady market is the fact that used machines with comparable engine hours and specs are selling for significant price differences.
Over the last six months, three used, late-model Case IH Steiger 715 tractors sold at auction experienced a massive $48,000 price difference spread.
Machinery Pete advises dealers trying to stay at the top end of the market to focus on “marketing the living hell” out of machines — and even the auction sale itself. And always hammer home the human faces and origin stories behind each machine.
“You don’t want people leaning backward in their chair. You want them leaning in,” Pete says. “You have to get them on the front of their seat. Back of the seat? That’s when you’re $40K soft.”
And with fall harvest fast approaching — or already on in some areas — the guys note late-model combines like John Deere’s S Series have softened value-wise over the last week. At the same time, well-conditioned, older tractors, combines and sprayers (7 to 10 years old) are still drawing above-average bids.
With the market in such flux, its crucial buyers do a lot of homework before buying and use sites like MachineryPete.com to monitor sales data to know a good deal from a pricey albatross.
“It’s the ‘80s stagflation thing [again] where supply is coming down, but the price isn’t moving,” Seymour says. “You’re seeing $430,000 combines sold with 250 hours that are 12-year-old machines. The (supply) volume goes down. but the price stays the same — it doesn’t go up or down. And that is where the market is. It’s not based on anything other than available capital, interest rates and what commodity prices look like and futures buying.”
Exploring Other Industry Trends
Shawn Hackett, president and CEO of Hackett Financial Advisors, says widespread disease and insect pressure noted last week by Pro Farmer Crop Tour scouts across the Corn Belt will “take some of the top off” USDA yield estimates for corn and soybeans.
“Years like this, what you see from the road is not what you see in the middle of the field,” Hackett says. “My work says Pro Farmer is probably on the right track at 182.7, but anything 185 (bu/ac national average) or less — and the closer we get to under 182 — then we’ll get back into an upper $4 or lower $5 corn futures market.”
Aaron Fintel, used equipment specialist with 21st Century Equipment, takes viewers on a used corn head market deep dive with Seymour.
He says dealers should know the current “sweet spot” for used corn heads sits somewhere between $50,000 and $100,000, and the most in-demand models are two–to- five-year-old John Deere C Series heads. Anything over $125,000, he adds, is a tough sell.
Head over to YouTube to watch the full episode. Hit the “Thumbs Up” button to “Like” the video and click on the “Subscribe” button to get a notification when a new episode drops.
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