$8 corn ignites used tractor values
It’s happening again.
Middle to late August and auction sale prices are jumping noticeably higher on good condition used farm equipment over a wide area, particularly in the upper Midwest. I’ve seen the same thing happen the last two years in August and now again here in 2012. Here are (4) examples on tractors from (4) different farm auctions last week:
1978 JD 4240 with 3,452 hours, sold for $32,000
August 28, 2012 farm auction in west-central Minnesota…6th highest auction sale price I’ve seen on a JD 4240 in last 16 ½ years:
To view all the auction sale prices I’ve compiled on JD 4240 tractors over the past 10 years, click on the link below:
1992 CaseIH 7130 with 3,060 hours, sold for $62,000
August 23,2012 on farm auction in southwest Minnesota…new record high auction sale price on a CaseIH 7130….previous high sale price was $56,000 on 9/9/96 farm auction northwest Missouri (1991 model, 890 hours)
1998 JD 8100 tractor with 3,190 hours, sold for $101,000
August 25, 2012 farm auction in northeast Iowa…2nd highest auction sale price I’ve ever seen on a JD 8100…record high sale price $105,000 on 11/19/11 farm auction in northwest Ohio (1999 model, only 1,340 hours)
2007 JD 8330 with 850 hours, sold for $167,000
August 24, 2012 farm auction in southwest Minnesota…new record high auction sale price…$10,000 over the former high sale price of $157,000 (2/22/12 farm auction west-central New York)
Even in harder hit drought areas, auction sale prices on good condition used farm
equipment remains strong. Two weeks ago I traveled through central and southern Illinois on a speaking tour and wound up the week in St. Louis, MO talking to a group of 400 farmers from across Missouri plus western and southern Illinois. Very hard hit drought regions. An extremely difficult year here in 2012, but most of the questions I fielded were focused on 2013. You could almost “feel” folks looking ahead to next year.
Good insurance and $8 corn a winning combination for building optimism. Just look at the (4) tractor sale prices I highlighted from last week.
The last two years I’ve seen the rising used farm equipment values in late summer and wondered what we’d see come November and December when the year end “tax buying” crowd barrels into the market. Everyone needs those last minute tax write offs. Used values did indeed spike even higher the last two months of both 2010 and 2011.
Is the same trend coming late in 2012? I think so, especially when you consider changes to the IRS tax law and potential bigger changes to come (reduced write off limits for equipment purchases).
But some qualifications this time around. Heavy dairy sectors in hard hit drought regions will likely see a spike in the number of farm auctions due to the excessive strain of continued high feed costs. The on-going equity drain is brutal.
More auctions plus fewer buyers in these areas will work to dampen used values in these spots. One ag lender I know from southeast Pennsylvania told me recently he was approached by 5% of his farm customer base in one week, all asking his opinion on whether they should have an auction.
I’ll keep on tracking sale prices day by day to see which way we’re heading. Stay tuned.
- www.Machinerypete.com (1-yr. subscription $69.95; 1-week $10)
- "auction results" 316,303 sale prices on ALL types of equipment. Updated daily
- "upcoming auctions" free searchable list of equipment on upcoming sales
- "dealer equip." free searchable list of equipment for sale by dealers
- "Who Makes it?" searchable database of farm equipment Mfg's
- "Classifieds" free place to list your used equipment for sale
- Machinery Pete blog...see what Pete's yakking about
- Machinery Pete YouTube videos (click on video player image on homepage)
- Pete's new Facebook page (lots of pics & info uploaded daily)
- Machinery Pete's 2011 Auction Price Guide: $19.95, call 800-381-0423