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Calling Out The Best Buys In Iron This Season
A growing recession in the trucking industry followed by several years of booming new truck sales is creating a windfall for agriculture, which highlights this year’s best buys in used equipment.
Used truck values plummeted nearly 20% in the first half of 2019. “After more than two years of accelerated economic expansion and record-breaking new truck orders, the national fleet of trucks finally reached and then exceeded the number needed to move the current volume of freight,” explains Chris Visser of JD Power Valuation Services (the former NADA Used Car Guide).
Used semitruck sales have worsened since June, putting pressure on auction and asking prices. For example, prices for model year 2016 Class 8 trucks have fallen 31% since July. Late-model, low-mileage trucks are no longer in short supply, and trucks with average and higher mileage are oversupplied, J.D. Power reported this fall.
“We expect that this increasing supply will offer buying opportunities in late-model vehicles for farmers looking to upgrade their trucks this winter,” says Bill Nelson of US Auctioneers of Rock Island, Illinois, one of the largest truck auction houses in the country.
The trucking industry pegs the average age and mileage of Class 8 trucks at 7 years old and 441,000 miles. Successful Farming magazine analyzed asking prices on 451 model year 2014 and 2015 Freightliner, Kenworth, Mack, and Peterbilt trucks (see page 36).
Although not so accentuated as semitrucks, supplies of late-model Claas 8 and 9 combines are also healthy due to strong recent sales of new harvesters of this size. After years of poor new combine sales, purchases as well as leases of large combines partially rebounded in 2017 and 2018. A portion of these harvesters are now being traded in, providing an opportunity to purchase a late-model, low-hour combine with advanced technology at used prices.
Of the two classes of combines, Class 8 (375 hp. and up) is in the strongest supply. A survey of dealer offerings conducted at press time found 1,148 Class 8 combines in dealers’ lots. The breakdown of this inventory by year is as follows:
- 2015: 234
- 2016: 268
- 2017: 256
- 2018: 384
These figures are certainly not as large as the supplies the industry experienced in 2015 to 2017, as dealers worked through a huge surplus of 2010 to 2014 model year harvesters. The supply of that age of combines has been diminished due to aggressive pricing and other incentives (such as low- or no-interest loans and extended warranty programs). “We don’t see the number of used combines up for sale from a couple of years ago,” observes Luke Sullivan of Sullivan Auctioneers. “There are still a lot of good combines out there.”
Another segment of the used iron market that is showing strong supplies due to a turnover in combines is late-model used draper headers.
Sales of draper headers have continued to be strong despite lower commodity prices since 2014. Farmers have shown a preference for drapers, which has boosted the sale of new units and kept used numbers low.
As late-model large combine turnovers have increased recently, so have the draper platforms that come with them. Availability of such models as the John Deere 635FD and 640FD and MacDon FD75 has increased, providing the opportunity to competitively price these units. Price ranges for these particular draper models can also be found on page 36.
Low-Hour Wheeled Loader
Another best-buy opportunity is low-hour wheeled skid steer loaders. Contractors and landscapers are turning over their skid steer fleets more often as business in those industries has been brisk. This doesn’t necessarily equate to lower prices for wheeled loaders. Rather, this turnover is placing more low-hour units on the market. The preference for tracked skid steers may be holding down the price on wheeled units. “There is always a preference shown for tracked loaders,” says Scott Cook of Cook Auction. “That preference may be putting pressure on wheeled skid steer prices.”
What’s Hot: Antique Muscle Tractors
Muscle tractors from the 1960s and 1970s have been the hot-ticket items at auction with collectors, particularly if they are unique, e.g., featuring front-wheel drive. In that regard, the hottest of the hot vintage horsepower is IHC 2+2s. In the last year, three model 7488s, all built in 1985, sold for $100,000, $105,000 and $115,000 each. The fascination with 7488s and their little brother, the 7288, is due to the fact that so few were built before this Super 70 series of tractor was killed with the takeover of IHC by Case in 1984.