Investing in used construction equipment
Used equipment for sale. Those four words have been known to send chills of excitement down many a farmer's back. But with fewer and fewer farm auctions and a little extra cash in their pockets, farmers have turned to investing in iron from other industries not faring so well during tough economic times – like construction.
“As the construction industry softened over the last few years, the tools it used – backhoes, telehandlers, excavators, and forklifts – became more affordable for farmers,” says Illinois farmer Patrick Watson. “And many have taken advantage of that opportunity.”
The many includes Watson and his uncle, Jim Trainor, who purchased a 2007 Ingersoll Rand VR 638 telescopic handler from their local dealer, Illini Equipment. With only 1,500 hours on it, the machine was originally used as a rental in the St. Louis, Missouri, area. But it ended up for sale at the Pontiac, Illinois, dealership when the housing market collapsed.
When we first bought it, the idea was to use it for a year and then sell it. But it has so much more capacity than my 45-year-old loader that it might stay around for a while,” says Watson. “We use it to move trees, as a forklift, and for other odd jobs.”
Introduced in the summer of 2004, the VR 638 was a popular item among builders for reaching high places with ease. Back then, the list price on a new machine was around $70,000. Today, you can find one for less than half that amount.
It's deals like these that farmers simply can't pass up. Yet, it's not just the price that's catching farmers' eyes; it's also the versatility of these machines.
“Farmers are looking for a machine that they can get as much use out of as possible,” says Paul Hendrix, IronPlanet's equipment pricing analyst. “They can do that by purchasing a machine that can handle several attachments, which gives it added utility, like a skid steer loader or a multiterrain loader (a skid steer loader with rubber tracks).”
Since these machines generally have auxiliary hydraulics to operate attachments and a coupler system on the front to quickly change them out, you can switch in a matter of minutes from a bucket to a broom, an auger to a trencher, or a fork to a grapple.
“In my opinion, that versatility attracts a farm buyer,” Hendrix says. “You don't have to have five different machines. You can have one and get various jobs done with different attachments.”
At home on the farm, too
Telehandlers and skid steer loaders aren't the only pieces of equipment finding a new home on the farm. Excavators, backhoes, and graders have also become favorites among farmers.
“Backhoes are probably the most common piece of construction equipment showing up in this neighborhood,” says Watson. “Fixing tile is the most common use. Between finding someone who will fix tile in a timely manner and the cost savings, a backhoe is a very cost-effective tool on the farm. And fixing tile is another way to make a landlord happy.”