Machinery Pete: Impressive Yields Driving Strong Equipment Prices

October 23, 2017 09:04 AM
 
 

As Missouri farmers drive home another harvest, record yields are showing up on yield monitors across the western portion of the state. After a rough start to 2017, a high-yielding crop wasn’t what area farmers expected.

“Everything has been above average,” said Kyle Stutzman, a farmer in Garden City, Missouri. “Average is 140 bushels per acre, and we haven’t run anything that’s been 140. Everything has been 150 to 200 [bushels per acre].

Soybean yields are also impressive with some fields averaging 30 bushels per acre over normal. The story line of record yields is playing out in fields across western Missouri. The recipe that pushed yields over the top was simple: timely rains.

“Rain makes grain,” said Carl Ferguson, a farmer in Adrian, Missouri. “We had more rain this July than probably ever in history of Bates County.”

As area farmers’ financial outlooks improve, the momentum is spilling over to local equipment dealers.

“We’ve already had customers upgrade combines because of the yields,” said Dale VanSlyke, regional operations manager for Heritage Tractor, based in Adrian, Missouri.  

“We're down to just over 20 used combines,” said Jeremy Knuth, vice president of sales for Heritage Tractor. “So, we're in a pretty good position and still some very strong activity some of our areas are still harvesting.”

The correlation between yields and equipment trends is something Machinery Pete is watching, even seeing larger equipment bring the highest price in 34 months.

“If you've got record yields, you're just more optimistic,” said Greg Peterson, host of Machinery Pete TV. “Then if the level of new equipment purchased the last one to three years has been lower, which we understand why that is, these guys have got to be aggressive and they can't have downtime. So, what it does is it focuses the interest on the very best condition used, and that's why we're seeing these competitive prices.”

Machinery Pete says this year’s trends are opposite of what he usually sees in September and October – two months that typically bring softer prices for equipment. However, November and December historically draw stronger equipment prices.

What happens if the solid footing in equipment prices continues? Watch “On the Road with Machinery Pete” to find out.  

 

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