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Pressure on used planters
Hoping to buy a planter in the coming months? Get ready to pay more.
And get ready to buy a used planter. John Deere has been sold out of new planters for delivery by 2012 planting season for a while now. In fact, the supply is so tight, even some who successfully ordered a new planter for 2012 won't get it.
“I talked to my dealer today, and he has eight new planters sold that won't get made in time for planting in 2012. He has been in business 30-plus years and has never seen this before.”
That quote was from an email sent to me in early September by Bob H., a farmer in the market to find an eight-row, 30-inch John Deere 1760 planter. He wanted to purchase a new planter but was surprised to hear Deere was sold out. So Bob was turning to the used market and contacted me.
What have I been seeing on the used planter market in late summer, early fall? Rising auction sale prices.
Take the example of John Deere 1760 planters. The data table shown displays auction sale prices on Model 1760s over the last few years. Prior to 2007, the highest auction sale price I'd seen on a 12-row Deere 1760 planter sold at auction was $34,000.
What has happened since 2007? I've seen 10 planters sell for $35,000 – and up to $48,000.
Model 1760s up nearly 27%
You'll see a 26.7% rise in value on used 12-row 1760 planters in 2011 ($30,000). That is opposed to five years ago in 2006 when the average price was $23,675.
I expect sale prices to rise more the last quarter of 2011 into early 2012. The auction sale prices I've seen of late support this. Again, remember that Deere is sold out of new planters. Look at the last three 12-row 1760s that sold at auction:
● $31,000 for a planter that sold August 31 on a farm sale located in west-central Minnesota.
● $35,000 for a planter that sold in north-central Iowa September 1.
● $36,250 for a planter that sold in east-central Illinois September 2.
Now take into consideration what time of year these three planters sold: late summer and early fall. My auction sale price data has shown clearly over the last two-plus decades that the November-to-February time period consistently produces the highest auction sale prices on planters.
All planter brand are up
And it's not just Deere that was sold out of new planters for 2012. I've heard rumblings of Kinze also cutting off new orders.
It was just two years ago (late 2009), I was writing about the glut of late-model used planters (especially 24-row models) on dealers lots and how this glut was driving down used values.
One thing has become very evident. Manufacturers are acutely aware of the connection between new equipment sales and the supply of late-model used units. This has changed from my early days of covering auctions 22 years ago. Too many 1-, 2-, and 3-year old used models on dealer lots (planters, combines, tractors) equal softening new sales and loss of pricing power.
Keep the supply of new ultra tight and you will continue to see rising prices on new. As a result, the value of used models keeps going up, too, which drives more folks to look at buying new for next year.
Better get your order in fast.