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Strong auction prices in wet regions

GREG PETERSON 06/16/2011 @ 11:37am 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

Where was that sale again?

This spring, more than I have for a few years now, I've been paying special attention to "where" auction sale prices are coming from. I'm eyeballing the possible return of the geographic factor to used equipment values. As in, "what's it worth?...depends on where it sells."

A few weeks back I wrote and blogged about the May 5th dealer auction in south-central Kansas that produced what looked to me to be some very "soft" sale prices, particularly on the late-model combines on that sale. At first blush I attributed this mostly to "dealer auction" factor, how since summer 2010 I've been noticing these large dealer auctions tend to have softer sale prices vs. traditional farm retirement or estate auctions.

But I underestimated the local weather factor.

Was very interesting to see the volume of comments I got from folks in the southern plains states commenting on how the continued very dry conditions may be also working to produce very soft sale prices on late-model, big ticket items sold at auction in that region. So I will definitely be keeping my eye on auction sale prices from the southern plains this summer. Will sale prices run on the soft side? Stay tuned.

Ok, so that's the dry end of the spectrum, but what about the opposite, all the states suffering from extremely wet conditions and delayed or no planting this spring? How have auction sale prices and used equipment values from these areas been holding up?

Very well, thank you.

Let me give you a couple recent examples. Just last Saturday (June 11th), on a small farm auction in southwest North Dakota, a 1979 JD 8820 combine in real nice condition with 2,967 hours, sold for $21,500. That's with NO heads. How high is $21,500? See for yourself:

The previous Saturday, June 4th, on a small farm auction in east-central Indiana, right on the state line with Ohio, a 2006 Case 410 skid steer with only 120 hours and steel tracks ($1,400 option) sold for $18,500.

Compare that to the Case 410 with just 150 hours sold on a December 14, 2008 auction in west-central Illinois for $14,000.

Mental Note No. 1: used skid steer values are bouncing back from lows seen back when the wider U.S. economy and the construction industry tanked 4th quarter of 2008 on into  2009.

Mental Note No. 2: early summer 2011 and used farm equipment in very good condition is holding its value quite well in regions hit by very wet planting conditions.


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