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Pete's random thoughts on the equipment market
A former sports columnist for the Minneapolis Star-Tribune used to run periodic columns under the heading: "Random Thoughts From a Cluttered Mind."
Allow me to borrow that motif this week.
Random Pete 1: 16 states in 1 day
Yesterday (Oct. 27th) was a busy day. I entered auction sale price data from 16 different states into our www.Machinerypete.com web site. Here's a list of the 16 states: OK, PA, TN, NC, MO, IA, WI, IN, MI, NJ, MN, WV, VA, ND, OH and TX. Makes for a nice bowl of alphabet soup! A few sale price highlights:
From an auction in west-central Missouri last Saturday (Oct. 23rd), a 2007 Bobcat S250 skid steer (Gold Pkg.) with 1,070 hours sold for $23,700. Sounded like a strong sale price to me, on a 3-year old skid steer no less. Perhaps a sign that market values on used skid steers are solidifying? I'll definitely be keeping my eyes peeled for more evidence of this. How does $23,700 compare to other Bobcat S250 skid steers sold at auction? See for yourself:
Let's see, what else from yesterday's haul of sale price data...how about the 2008 JD 5603 MFWD tractor with 1,100 hours and a loader sold on a north-central Tennessee auction Oct. 16th? Another very strong sale price given it had over 1,000 hours. Once again, compare for yourself:
Random Pete 2: Will new & used equipment sales be affected by Tier IV?
A friend e-mailed me last night and asked me my thoughts on this report released yesterday from the University of Illinois on the new Tier IV engine regulations:
He posed a question to me: "Pete, I wonder if the new engine requirements will affect the price of 2010 and prior tractors and combines? Will we get a little price "bump" as farmers decide to buy current technology equipment before the deadline?"
My reply: Jim, It won't be a "little" bump. Big bump more like it. I've blogged on this topic a # of times on our web site and talked to lots of folks when I hop around to cover auctions all over the place. Definitely has been on folks mind last 1/2 of 2010 and now factor in commodity prices spiking...implement dealers are going to B-U-S-Y next 2 months and good used equipment selling on nice farm auctions in November & December??...could be time for Katie to grab that Bar for the Door."
Seriously, the proof just continues to pour in from all angles. Very nice condition used equipment is at a premium right now and folks are willing to pay top dollar to acquire it. Even used equipment that is older, wither what used to be considered high hours has been bringing more money at auction. I noticed this trend beginning back in July and its only picking up steam as we slide into the last 2 months of the year.
Here's a link to a discussion in Machinery Talk on this very topic.
Now, I don't compile sale price data on land values. But as I've written about many times over the years, when looking at used farm equipment values generally speaking, or more specifically tied to local geographic areas, I think it is so important to consider the big picture. So factors like: what's the current price of corn/soybeans/wheat/sugar/cotton/beef/milk? How were yields in this region? Was last year a good year financially? Have there been many local auctions and are many on the horizon?
And most definitely, what have local land values been doing?
When you start to tie all these factors together and then also consider what's happening on the new equipment sales front (strong), I come away with a sort of temperature reading into folks attitude on the used equipment market, up, down or sideways.
Late 2010 into 2011? Up.