Machinery Pete: Recent Lessons About Used EquipmentJanuary 25, 2017
There are some lessons to be learned from a very nice farm auction held Dec. 28 in south-central Minnesota. My friends at the Steffes Group conducted the sale.
It featured a clean line of well-kept equipment with a bit of age on it. This is exactly the kind of used equipment most buyers look for. Here are the highlights that caught my eye:
- $25,000 for a 2001 Kinze 3000 8R-30 planter: This is a record-high auction price for an eight-row 3000.
- $22,500 for a 1998 New Holland 8160 tractor with 7,897 hours: This is the highest auction price I’ve seen in five and a half years.
- $42,500 for a 1996 Challenger 55 tractor with 4,630 hours and tracks: This marked the highest auction price in 37 months.
- $36,000 for a 2003 Case IH MXM140 tractor with 2,283 hours: This represented a particularly strong price for a machine with no loader.
- $49,000 for a 2000 Case IH 2388 combine with 3,094 engine hours: This is the highest price in four years for that model year.
- $3,400 for a John Deere 1210A grain cart: This proved to be the highest auction price in more than four years.
The Minnesota auction provides several important guidelines for producers pricing used equipment in the new year.
Lesson 1: There’s still buyer demand for good-condition, smaller-sized used equipment. That $25,000 sale figure for the eight-row Kinze 3000 is a “wow” price. A few years back, I watched a string of six-row John Deere 7000 and 7200 model planters sell for one high price after another. I shot a YouTube video of a very nice Deere 7000 six-row planter selling for $9,800 at a southern Wisconsin farm retirement auction. That was the second-highest auction price in the past 20 years. The last eight bids flew higher in $100 increments. New farm equipment has continued to get bigger and bigger through the years. But there is demand for the smaller stuff in very good condition.
Lesson 2: Timing is important. Year-end is a great time to be a seller. I saw strong auction sale prices from Nov. 1 through the end of the year on good-condition equipment. That trend held true even on large late-model equipment. Take the 2014 John Deere S680 combine with 526 engine hours that sold for $286,000 on Nov. 2 at a farm auction in east-central North Dakota. That was the highest U.S. auction price of 2016 on a John Deere S680.
Lesson 3: Buyers always want slightly older used equipment that’s in very good condition. That was true for the machinery 10 or more years old at the Dec. 28 auction. Buyers pay premiums and happily so. But why wait until equipment is 10 years old or older? Why not buy where greater value awaits, namely in the four- to seven-year-old age range?
Lesson 4: Buy seasonally. Over the past 27 years, our auction price data points have shown the best time to be a buyer begins in mid-March and continues into the summer months.
Do Your Homework. Check out MachineryPete.com to view 100,000-plus used equipment items dealers have for sale. Click the “Upcoming Auctions” tab at the top of the home page, then click on “Equipment” and you can search for specific equipment categories, makes and models. The site is updated daily. Find that needle in the haystack you’re after.
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