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Deals to be found on livestock equipment

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While the past few years,
generally speaking, have been pretty good for grain farmers, those same years
haven’t been as kind to the livestock and dairy sectors.

Sometimes I feel like a
scorekeeper, sitting here compiling auction sale price data on all types of
used farm and construction equipment.

What I’m continually struck
by is the raw power of sentiment. Farmers asking, “Do you think the months and
years ahead will bring better times? Or do you think times will be worse?”

Collectively, these widely
held views can and do affect markets – even the used equipment market.

Take early August 2010, for
example. A report was released detailing severe trouble with the Russian wheat
crop. Talk of surpluses turned to deficits. The price of wheat doubled. With
corn, talk of a USDA report citing weak crop conditions sent the price upward.

So when I got a sale price
report from an August 5, 2010, grain farm auction in north-central Iowa, it
wasn’t surprising that it showed very strong sale prices.

In fact, a couple records
were set according to my historical data. One record set a $78,000 final bid
given for a 2002 Case IH Model MX220 front-wheel-assist tractor with 1,462
hours. That is easily the highest auction sale price I’ve seen on that make and
model.

Another record price was set
on a pair of Parker 4800 gravity wagons. They went for $8,000 each.

Now For The Flip Side

It’s definitely not a
bullish attitude at auctions with livestock and dairy equipment, however.

There were a couple years of
tough losses, then a glimpse of profitability, followed by a possible crescendo
of grain prices late in 2010 and into 2011.

Look at the table on the
opposite page that shows auction sale prices on various makes and models of
manure spreaders. Pay particular notice to the the New Idea Model 3639 manure
spreader that sold on the northeast Wisconsin auction in June 2010 for $2,500.
I thought this spreader, which was in excellent shape, would bring a bit more.

More Examples

Look now at the chart on
this page (above). It shows the average auction sale price on New Holland Model
355 grinder/mixers.

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The values on grinder/mixers
began to increase back in 2004 as the price of steel shot up. Values kept on
rising right into 2008. Sharply rising commodity prices began to adversely
affect the profitably of the livestock sector, and average auction prices on
New Holland Model 355s fell hard in 2009. They’re still falling in 2010.

For example, on a February
9, 2008, auction in northeast Iowa, a New Holland Model 355 sold for $15,000.
And then 13 months later, on a March 28, 2009, auction in this same northeast
Iowa region, a New Holland 355 in like-new condition sold for $10,000.

Here’s further proof of the
softness in the livestock equipment sector. On a March 7, 2006, auction in
southwest Nebraska, a 2002 Haybuster Model H1100 tub grinder in good shape sold
for $24,000. On July 15, 2010, a 2003 Haybuster H1100, also in good shape, sold
for $12,500 on a sale in southeast North Dakota.

That’s four years later for
a comparable tub grinder and it’s worth nearly half.

This speaks volumes about
the great opportunity that exists right now to cash in on much cheaper values
for livestock equipment.  

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