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Combine values rebound

GREG PETERSON 12/06/2011 @ 10:05am 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

The sky isn't falling on used combine values, and those values definitely aren't experiencing the searing heat I'm seeing on used tractor values in 2011. New high-auction prices on used tractors continue to roll in from throughout the U.S. and Canada on all makes and models from 5 years to 40+ years in very good condition.

For used combine values, they are bouncing back just a bit. In the late second quarter of 2011, I was beginning to wonder.

A couple large auctions with high numbers of later model combines produced some very soft prices. Dealer lots had begun to fill up with late-model used combines. That was a by-product of very strong sales of new combines the last few years and a slowing absorption rate on dealers moving used combines off their lots.

Manufacturers were getting concerned, and dealers were definitely getting concerned. I just kept on tracking and compiling auction data. See the table at the left for a list of late-model used combines sold over the last 12 months.

Prices rebound

So what about those soft auction prices I mentioned from late spring 2011?

I'm talking prices like $155,000 for a 2009 Deere Model 9870 STS with 1,021 engine hours that sold on a south-central Kansas dealer auction last May. At the same day, a 3-year-old 9870 STS with 910 engine hours sold for $165,900 on a consignment auction in Nebraska. Prior to those sale prices, the low $180,000 range was the bottom I'd seen for prices on 9870 STSs.

But since late spring, values have rebounded. Two large dealer auctions, in particular, stand out. First was a huge Ritchie Brothers auction in St. Louis, where 32 mostly late-model combines sold. I thought the high number of combines would lead to more soft sale prices.

Nope. Sale prices ticked in a notch higher than I was expecting – like $220,000 for the 2010 Model 9770 STS with 346 engine hours.

More proof of solidifying late-model combine values came on a July 21, 2011, online dealer auction at Purplewave.com. This was an absolute auction for Dean Ag Services, a large Caterpillar dealer in western Missouri and eastern Kansas with 25 mostly late-model combines. Once again, prices ticked in a bit higher than I was guessing, starting with a 1999 Case IH Model 2388 combine with 2,733 engine hours. It was in good condition and sold for $93,500. I'd been seeing similar 2388s selling in the high $60,000s to low $80,000s at auction.

The same July 21 Purplewave.com online auction also had a 2008 Deere 9670 STS with 993 engine hours go for $176,000 (10% buyer's premium included), a very strong sale price.

On farm retirement and estate auctions, I have continued to see very strong sale prices on used combines in very good condition like the 1997 Deere 9500 with 2,148 engine hours that sold for $65,500 at a Minnesota sale in August.

Remember how I said the used tractor market was hotter? At that same Minnesota auction, a 1991 Case IH 7110 tractor with 1,477 hours sold for $57,000, which was a new record-high sale price.

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