Online Iron Sales Thrive in COVID-19 World
The trend toward buying machinery online either through auctions or from dealers had been growing steadily in the past decade, but “in person” was still a primary means of equipment and supply purchases … until COVID-19 hit in March.
Many dealerships closed their front doors, and equipment auctions went strictly online. “I think at first farmers held back a bit on plans to upgrade equipment going into spring planting,” observes Scott Steffes of Steffes Group.
Farmers still had to plant crops, feed livestock, “and needed to upgrade equipment during this first stage of the pandemic,” observes Kyle McMahon of Tractor Zoom, an auction listing website. When dealerships shut their front doors or auctions went strictly online, farmers not comfortable with searching for and then buying machinery on their computers or smartphones quickly adapted.
The COVID-19 crisis acted as a catalyst to convert late adapters to online buying. “I have always felt that agriculture has been five to seven years behind Silicon Valley when it comes to adopting new technology,” McMahon says. “That said, COVID forced adoption of online bidding. We will see a higher number of farmers bidding online after COVID than we did before COVID.”
Proof of that can been seen in the prices being reached at online auction sales. Well-maintained equipment with low hours commanded a strong price premium, Steffes says. “We sold the highest priced tractor in the history of our company this past year, a late model John Deere RX,” he adds.
A similar multistate auction service, Sullivan Auctioneers, held one of its largest consignment auctions in the firm’s history in August “and it brought prices as good if not better than from past similar auctions,” says Matt Sullivan.
Brand new machinery sales have also been positive despite projections in March and April that they would be down. Sales of 100-plus-horsepower tractors took a 3.5% dip the first half of 2020 but then grew by more than 3% during the summer. Even the most expensive piece of equipment on the market, combines, saw a modest increase in sales during the summer. Finally, sales in all equipment segments grew in September. “We’re cautiously optimistic that this year may end up strong despite all of the headwinds in the market,” says Curt Blades of the Association of Equipment Manufacturers.