Ok, this is getting very interesting.
What? The development I’m watching play out in the used farm equipment auction market this summer. It’s becoming apparent to me as the sale price data streams into our office daily, that an increasing premium is being paid for the really nice condition used tractors 7-20 years old.
Want an example? Thought you would. I’ve got a couple for you. First let’s peek in on a super nice farm retirement auction July 31, 2010 in east-central Nebraska, near the town of Rising Sun. Sold that day on the well-attended auction was a 1996 model JD 8400 MFWD tractor in 3,400 hours.
Sale price? $99,000.
How high is that? Well, I just looked all (70) dealer listings here at Machinefinder.com, plus I went back through the dealer advertised data we compile. NO dealer advertised prices touched the $99,000 auction sale price. None. Amazing. The higher advertised price I saw here in Machinefinder.com was $90,000. The highest advertised price on our web site the last three years was one lonely 8400 listed at $99,000.
Want to really be blown away? So far this year, according to the data we compile, the average auction sale price on a JD 8400 tractor = $70,646. The average dealer advertised price we show? $70,768, a difference of only $122!
Couple things going on I think. One is the continued lack of farm auctions across the U.S. and Canada. Just not that many sales, especially not many featuring great condition later model equipment with a bit of age on it, like the 1996 model JD 8400 on the east-central Nebraska auction July 31st. So when nice auctions do pop up now….kind of Katie bar the door type response from interested buyers.
The other thing going on? Well, I suspect a renewed optimism floating around with the recent spike in wheat price and more bullish reports for commodity prices looking ahead. Certainly doesn’t hurt. In fact, these very strong auction prices started rolling in here in droves, just in the last couple weeks.
Another example for you. On a north-central Iowa grain farm auction August 5, 2010, a CaseIH 2002 model MX220 MFWD tractor with 1,462 hours sold for $78,000. That’s the highest auction price I’ve seen on an MX220. Ever. Two days later on a farm auction in northwest Ohio, a super nice 1998 JD 8100 MFWD tractor with 2,100 hours sold for an extremely robust $80,000.
These are “hard cash” auction sale price figures folks, not advertised prices. Bottom line is as I said before, definitely a growing premium being paid for the really nice condition used tractors out there on the auction market right now.
About Machinery Pete: Greg “Machinery Pete” Peterson has been working in the agricultural industry for 21 years and details agricultural equipment prices and trends at his website, Machinerypete.com. Greg also writes columns for Successful Farming magazine, Implement & Tractor magazine, Agriculture.com web site and also appears on the Machinery Show on RFD-TV.