Trends with used farm equipment values are always top of mind with me as I pour through the different types of data (auction price data, dealer listing price data, search traffic data) our Machinery Pete business churns out daily. There are two trends I want to pull forward and touch on here with you as the calendar flips to March 2017:
- Sliding values of “average” condition used equipment
- Self-propelled sprayer market showing signs of life
I really started to notice falling auction sale prices on the fair, average sort of rough condition used equipment last summer. One thing was becoming quite clear: more farmers were taking one or two used items either to regional consignment auctions or online auctions and selling to free up some cash throughout 2016 and on into early 2017. And generally speaking the equipment items showing up for sale tended to fall in that “average” condition range.
And values fell — sometimes sharply!
Here are a couple of examples for you. Case IH 7120 Magnum tractors, made from 1987-93 in the 150 HP range, saw average auction sale prices fall by 28.4% last year, from $37,349 in 2015 down to $26,729 in 2016. That big drop was driven by the 64.7% increase in the number sold at auction last year. Despite these facts, buyer demand for the very nice condition 7120 Magnums remains strong, as evidenced by the Dec. 14, 2016, farm auction we filmed for our Machinery Pete TV show in central Ohio where a 1989 model Case IH 7120 front-wheel assist with 3,726 hours sold for a solid price of $50,000, well above the average auction price. Here’s the YouTube video I posted of it selling:
I found a similar trend with John Deere 4960 tractor values. Deere made the 200 HP model 4960 from 1992 -94. Last year the average auction price fell 10.7% to $32,860, down from $36,806 in 2015. Once again, the drop in average auction prices last year was driven by a very large spike in the number of 4960s sold at auction, a 48.6% increase. Wow! Even more striking is to compare back 4 years ago to the year 2013. Then the average auction price back on a John Deere 4960 tractor was $65,547, double the average auction price last year, plus there were 246.7% fewer 4960s sold at in 2013 vs. 2016.
It looks like 2017 could likely be a continuation of this trend of seeing more average condition used items being brought to wholesale auction by farmers to sell to free up extra cash. But I think we will also continue to see the very nice condition used items attract strong buyer interest as new sales remain soft. Folks continue to fight over the really nice used stuff.
Another trend I’ve been monitoring of late is that of increased buyer demand for and strengthening, or least not falling further, on used values on self-propelled sprayers. Here’s a big picture look at used self-propelled sprayer values from my Machinery Pete “Used Values Index” report for 4th quarter 2016. This report is based on the auction sale price data I’ve been compiling now for over 27 years. Note how used values have flat lined the past 3 quarters and are actually up just a smidge since mid 2015.
Late in 2016 I was beginning to see some stronger auction sale prices on sprayers, like $245,500 for this 2015 Hagie STS12i from central Indiana with 382 hours, 1,200 gallon tank, 120 foot boom, that sold at a Dec. 28, 2016, BigIron.com online auction. That’s a strong price from a “hard cash” perspective. Here’s a pic of it.
On Feb. 25, 2017, we filmed a farm estate auction in northeast Kansas where a nice 2008 John Deere 4720 sprayer with 1,501 hours, 800 gallon tank, 90 foot boom, sold for $103,000. The average auction price last year on 4720 Sprayers = $55,387. The highest auction price last year on a 4720 was U.S. $107,642 (2005 model, 1,287 hours, April 13, 2016 farm sale in Saskatchewan. Folks at the February 25 northeast Kansas auction seemed surprised the 4720 got up to $103,000. Here’s video of it selling.
The day before, Feb. 24, 2017, a huge farm liquidation auction in central Ohio (“Movers & Shuckers” farming operation, recently into ag, advertised widely offering to pay high cash rent) featured a pair of late model sprayers. A 2016 John Deere R4045 with 216 hours, 1,200 gallon tank, sold for $317,500. During this same sale, a 2014 Rogator 1100B with 622 hours, with 1,100 gallon tank, sold for $170,000. Here’s video of the 2016 John Deere R4045 selling for $317,500.