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The Best Year-End Buys in Farm Machinery
Opportunities to price out equipment to capitalize on depreciation deductions for this year abound as particular pieces of machinery are selling at historic low prices thanks to high inventories.
The following are some of the best buys available today.
Precision Ag Electronics
Several years ago precision agriculture equipment such as receivers, displays, monitors, etc. either stayed with the machinery it was installed on when sold or traded in, or it was removed only to sit in boxes on dusty shop shelves. Then entrepreneurs like Jon Bickle of Used Precision Ag Solutions started buying up old gear, reconditioning, and then e-selling such electronics. That caught the interest of equipment dealers, particularly John Deere dealers, who started doing likewise.
Today, it appears that used electronic equipment stocks may be outpacing demand.
I checked on John Deere’s used equipment dealer website, machinefinder.com, and found nearly 1,200 listings for Deere receivers displays, application controllers, activations, and other related items. A year ago a similar search at that same website found under 700 listings. This growth in inventory is affecting used electronics values.
For example, last winter I tracked dealer asking prices on 13 John Deere 2630 displays (model years 2014 and 2015). Their average asking price was $4,809.
Recently, I performed a similar search and found two dozen 2630 displays with average asking prices hovering around $4,000.
And last August I watched a John Deere 2600 display with some activations sell for $3,000 at a Steffes Auctioneers sale. That certainly is below the $4,000 average mentioned before. These examples reveal there are opportunities to invest in late-model precision ag equipment at bargain prices at the present time.
Auction yards and dealers’ lots are awash with grain wagons and that is having a telling influence on their values. I witnessed this at a preharvest auction in Iowa last August.
On the block that day were two absolutely cherry Brent 644 wagons. One was a 2009 model while the other was built in 2008. Both had roll tarps, work lights, trail lights, brakes, 425/65R22.5 tires, and left-hand discharges.
The 2009 model went for $9,250 while the 2008 trailer brought $8,900.
Next up was a very well cared for 2011 Brent 544 (equipped similar to the 644s) and it only bought $8,900.
Just four years ago similar trailers would have easily brought $12,000 to $15,000.
Certainly, lower commodity prices depressed grain wagon prices from 2014 to 2016. What is further depressing wagon values today is the continued high inventories of such iron on dealers’ lots and auction outlets.
A surge in the purchase of round balers in 2014 and 2015 is now placing large numbers of these machines on dealers’ lots from trade-ins. Additional numbers of balers are reaching the market this winter with a flurry of farm retirement auctions. This situation offers an opportunity to get a good deal on late-model balers as their values are projected to fall another 8% to 10% this winter.
Analysis of average dealer asking price for 3- to 4-year-old 5×6-foot balers (the most popular round balers models) finds the following price averages by make:
- John Deere 569: $32,500
- New Holland Roll-Bale 560: $33,100
- Vermeer 605N: $31,000
The one proviso influencing these trends is that little-used balers that have been well cared for will always bring prices above these averages.
A year ago the best buy in combines was late-model Class 7 combines such as the John Deere S670, Case IH 7230, New Holland CR7090, or Class Lexion 740. But supplies of these late-model combines has great diminishes in 2017 as dealer incentive programs have liquidated stocks. However, there are great buys yet to be had with Class 8 combines. A check on John Deere’s used equipment website, machinefinder.com, finds a whopping 1,250 model S680s available for sale. Similar inventories are being reported on other brands of such harvesters.
Successful Farming analysis of the situation projects that average values on Class 8 combines are 4% to 6% lower than a year ago, which presents a best buy situation before year’s end. Additional incentives being offered by dealers to move out these machines included low- or no-interest loans, certified preowned programs providing extended warranty coverage, and the opportunity to lease late-model harvesters
The following are the average dealer prices and price ranges on the most popular Class 8 combines:
- Case IH 8230: Average price – $259,900. Price range – $171,500 to $359,000.
- John Deere S680: Average price – $269,500. Price range – $189,000 to $400,500
- Gleaner S78: Average price – $243,750. Price range – $201,000 to $289,000
High-Horspower FWD Tractors
Late-model, high-powered front-wheel-drive (FWD) tractors are still clogging up dealers’ lots and are a big-time target for liquidation this winter. This has exerted downward pressure on their prices lowering asking values 4% to 5%. For example, a year ago the dealer asking price range on John Deere 8320R was $202,500 to $310,750. In early November, that price range was $179,500 to $285,000.
Look for year-end sales of these tractors by dealers looking to downsize their inventories. As is the case with late-model combines, dealers are offering a wide variety of incentives to move these tractors off their lots. And in an effort to liquidate inventories, you can expect to see many of these tractors going to auction lots this month.