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24 rows and one year's use

GREG PETERSON 02/14/2011 @ 2:19pm Greg Peterson writes "Machinery Pete" column for Successful Farming magazine and appears on the Machinery Show on RFD-TV, talking about trends in the used equipment market

Standing in the driving snow just outside of Fairmont, Minnesota, on December 11, 2010, I was attending a farm retirement auction featuring a large line of very late-model farm equipment for sale. Did I mention it was snowing? It was almost a complete whiteout with 35-mph winds.

Nearly 20 inches of snow fell that day, but the auction went ahead.

I’ve always had a theory about auctions held during very bad weather. It seems to me that sale prices actually come in higher on these sales. I believe folks think they may get a bargain and then figure they might as well bid once or twice or more as long as they have braved the elements and are standing there at the sale.

My theory held up at the Fairmont sale. Prices seemed strong. Of particular interest were two 2010 Deere Model 1770NT CCS 24-row planters up for sale.

A Matter Of Supply And Demand

Six, 12, or 18 months ago if I would have seen an auction with two very late-model 24-row planters like this, I would have bet the farm on soft sale prices. At that time, it just seemed the tables had turned and dealers had late-model 24-row planters stacking up on their lots. Supply and demand had shifted to a buyer’s market, and consequently, prices were falling.

But that was then. Things were different by the end of 2010.

As for this pair of 2010 Deere Model 1770 planters, the first one sold for $135,000; the second one went for $140,000.

Anytime I see this scenario – two identical items selling and the second one going for more money – that indicates there is strong buyer demand.

Of course, it didn’t hurt that commodity prices had surged higher late in 2010, or that south-central Minnesota (where this auction took place) saw very strong yields.

And one more not-so-small factor was at play at this sale: tax avoidance. December is the perfect time to sell – blizzard or no blizzard.

Be sure to check out the table on the previous page for prices on a variety of 24-row planters that have sold at auction over the past 12 months. If you want to see even more data on each of these items, go to my website at machinerypete.com.  

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