Grain wagon bids defy gravity
Wall Street analysts have been calling, wanting my opinion on the current state of the used farm and construction equipment markets. I suppose they are looking for insights into what's happening with used equipment values, and they are hoping the information can shed some light on conditions for new equipment sales in the months ahead.
I'm always happy to visit with Wall Street. During the last conference call, I rolled out something new, my Machinery Pete Used Equipment Price Index. I broke the used farm equipment market down into segments and then assigned a 1 to 10 rating to each market segment, with 10 being the strongest or highest used equipment values.
My rankings were, of course, based on all the auction sale price data I've been compiling for the past 21 years. For the initial index ratings, I focused on the second quarter of 2010.
So, for example, the used hay equipment segment got a score of 5.5, up a bit from 4.0 last year. The last couple years have been tough for cattle and dairy farm operations, and, as such, used hay equipment values suffered. But I began to see auction sale prices on used hay equipment strengthening in late spring 2010, hence the bump from 4.0 to 5.5.
If It Hauls Grain, It's Hot At Auction
The hottest segment the past couple years and still today are used grain trailers, grain carts, and gravity wagons.
From November 2007 through 2008 and on into early 2009, I had this market segment at a rating of 9.5. Auction sale prices were through the roof!