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Late-model harvesters flood sales
This winter promises to offer some great bargains in late-model used combines. Prices don’t lie.
Take a look at the chart below. This represents the trends in auction (live and online) prices for various Case IH combines going back to July 2012. Below, you will find a table revealing recent final bids on late-model red harvesters.
Those Case IH trend lines reveal two key facts:
Prices for late-model combines take a dive after harvest is done (November to February). That makes sense because producers are far more interested in buying tractors, planters, and tillage equipment at this time in anticipation of spring planting.
Prices for combines pick up again starting in March and hold strong until October. To confirm this, I ran similar comparisons going back two years previous to July 2012, and the price trend line holds true.
Not the case last fall
But wait! The traditional summer-fall price bump didn’t happen this past year. Look at the price figures during the July-to-October period in 2013. Prices plummeted, particularly for model 8110s, 7088s, and 8120s. I didn’t have sufficient sales figures for very late-model Case IH models 9120, 8120, 7120, 7088, and 2588 from past years to run a comparison of those combines. If I did, I would warrant that even the latest late model combines took a price hit late last year.
Price slump in the cards this winter
I’ll go out on a limb here and project that this winter will be a great time to buy a used harvester if you have been considering adding a second or, possibly, a third combine to your fleet, or if you’re considering upgrading your harvesting technology. I make that prediction based on recent trends.
I’ve been hearing from dealers, auctioneers, and farmers that there is a surge of good used, late-model harvester combines hitting the market. Those rumors are backed up by huge numbers of combines showing up at auction last July and August and in the buildup in inventory on dealers’ lots. This phenomenon is being caused by two factors.
A lot of new combines have been purchased the last several years. The trend here was caused by large operations turning over a combine or two every year to capitalize on bonus depreciation and Section 179 accelerated depreciation. A huge tax write-off combined with record income the last several years has inspired the perfect storm of sales.
This, in turn, has steadily built up the fleet of very late-model combines on the market over the last several years to the point that we may be experiencing a glut on the market right now.
Combine that trend with depressed commodity prices, which don’t exactly inspire iron purchases, and you have the makings for a price selloff this winter.
Evidence of this can be seen regarding late-model machines such as Case IH 8120s, 7088s, and 8010s. Compare the July-October price periods in 2012 and 2013. Prices should have increased during last summer and fall. Instead, they took a huge drop. I don’t expect them to rebound this winter.
Price ceiling in place
If you were to ask what price to pay for combines this winter, I would direct you to the averages listed for the July-October 2013 period in the chart. I believe that to be a solid bidding ceiling you can take to auction this winter.
Remember, harvester values take a traditional dip during the winter months.
So if you want a second combine (one dedicated just to soybean harvest, for example) or if you’re looking to upgrade harvesters, then look for bargains at auction this winter. I have one caveat to impose on this prediction, due to a reminder from Dan Sullivan of Sullivan Auctioneers (sullivanauctioneers.com).
“Late-model, low-hour combines in excellent condition always fetch premium prices, even in a down market,” he says. Of course, Sullivan is right.
If you’re interested in buying a Case IH 8120, use the $168,340(the most recent price listed in the chart) as a guide, and then adjust your price according to the combine’s condition.