More "bank items" showing up at auction
"That was a bank item."
I'm hearing this comment more and more from our network of auctioneers. I'll call to ask how equipment sold on the sale they just had and we'll be going down the list of equipment, what each piece sold for, and the "bank item" comment jumps up again and again.Not hard to understand why.
It's been a tough go for dairy, cattle and hog operations the last few years. Now grain prices jump again. More pain and pressure. Then factor in what's happened on the lending front. No doubt the Wall Street/banking turmoil going back to pre-recession days and subsequent new tougher lending regulations and requirements from Washington have changed things.
Belts have tightened.
So we're beginning to see a higher percentage of farm auctions where you'll hear the reason for the sale was the bank pushed for it, especially in strong daily/cattle areas. And on regional consignment auctions more of the equipment for sale will be "bank items." Interesting to see how these "bank items" sell vs. similar equipment sold at auction under different circumstances. We're still down the same crux of the matter:
What's it worth?
On an auction Tuesday (Oct. 12th) in northeast Wisconsin, a JD 5525 MFWD tractor (no cab) with 2,858 hours sold with a JD 542 loader. This tractor was a "bank item." More background info: the tractor was in "fair" condition and had recently had $1,000 in new plastic parts. What did it sell for?
How does $24,000 compare to other JD 5525's sold at auction? See for yourself by clicking on the link below that shows the last (14) JD 5525's I've seen sold at auction.
The "bank item" issue is just one contributing factor making fall 2010 a very, very interesting time to be following the used farm equipment market. Yes, we've got some increased stress forcing more equipment to be sold, but at the same time there are other opposite forces at work. Commodity prices are up, up, up. Grain farm operations feeling bullish. We're also still facing the reality of very high and rising price of new equipment, which works to make the very good condition used equipment very desirable.
So I see auction prices like $52,000 for the Gleaner R62 combine with 2,336 seperator hours, sold on a September 3rd farm auction in the same northeast Wisconsin region I highlighted earlier. Auctioneer Gregg Miller reported to me a huge crowd for that sale with very strong sale prices across the board.