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Used iron surging
A couple of weeks ago, Greg "Machinery Pete" Peterson reported a noticeable trend in the used machinery and equipment marketplace: Already high auction sale prices are even higher than they were a year ago.
And, Pete's not alone. Farmers say they're seeing higher prices at auctions in their areas, some of which seem fed by regional demand and others that seem a little more out of line considering the iron selling and the prices it's fetching.
"Used values really shot up after the 2007 crop year here and haven't stopped since," says Agriculture.com Machinery Talk member nwobcw. "I looked at a 4630 on a dealer's lot. Almost 8,000 hours for $18,500? Taking into consideration their known rear-end problems, it's $5,000 too much."
Though that seems a bit unrealistic for that specific price tag, Machinery Talk member Nebrfarmr says it's demand driving prices in his area, at least for some specific pieces of machinery.
"Our local dealer had an IH 766 for $12,000 or $12,500. The scary thing is there is such a shortage of 80- to 120-horsepower tractors around here right now, he got it sold. Granted, it was pretty nice for its age, but the thing had no cab and was almost 40 years old," he says. "Five years ago, I could have bought all the 66-series tractors I wanted (766 through 1466) in similar condition for $6,500 to $8,500. Newer tractors in the same size bracket are even crazier."
Peterson says tractors, combines and grain wagons are among the items that have seen the most consistent price increases in the last year. So, with increases like with J&M 525 gravity wagons, which Peterson says are worth $2,000 more than they were a year ago, what can you do to stay ahead of the price curve?
"Buy, sell, trade and appraise used equipment with your eyes wide open, knowing where we are with used values right now," he says.