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Iron Comps 3rd Quarter Used Equipment Market Report

10/21/2020

Tractors and Combines See High Volume Movement in Pre-Harvest Auctions

In the Iron Comps 3rd Quarter Used Farm Equipment Market Report (access full downloadable report here) we saw significant volume of combines and tractors move in the months of July and August. Along with the high volume of auction sales, there were very low-hour combines sold at a massive dealer auction in our July data that could have set a trend for years to come. (Note, the actual date of that Sinclair Auction was in late June, but the verified data was completed in our system under a July 1st date stamp). In this market report, we have also added a new variable on the tractor average sales graph. You will find a dashed line representing the average hours of the tractors sold during that month. This gives those valuing equipment an idea of the age of machines being sold at market, and can help explain some of the swings in auction block values.

Used Tractor Sales Mirror Farmer Sentiment

The dam holding back tractor sales during the early COVID shutdown period seemed to continue to pour out more inventory into the market. July and August saw a few dealer auctions that offered a good number of high quality machines. In general, the average prices offered for these 100+ HP tractors in 2020 is on par, if not slightly higher, than 2019. This parity is more significant when you consider that the hours of these machines being sold are about 5-10% higher than last year. The month to month swings that you see in prices are influence by hours of machine, but not entirely. There are other variables that also have a significant effect on used tractor values that we'll discuss in future articles.
Considering the favorable, changing tides that have put extra cash into farmers' pockets this summer and fall, it is not unreasonable to expect this used tractor market to show great strength in terms of volume and price premium this fall.

3rd Quarter Used Combine Sales Reflect Agriculture's Rollercoaster of a Year

July started with a bang following the June 30th Sinclair Dealer Auction, selling 74 combines in one day. Many of them low-hour models which are a rare sight on the auction block. These harvesters with a lot of life remaining were the cause of the volume and price spikes you can see in the report. From an Iron Comps valuation view-point, these values provide good comparable sales if you are trying to value a newer piece of equipment. From the combine market standpoint, they may have had a saturation effect that carried over into August. Traditionally an already strong month for combine sales, this August saw incredible volume move. Tractor Zoom tracked over 500 combines sales in that month alone. Lead by an additional three dealer auctions. These dealer auctions may be more prevalent in the following years. (The 300 combines you see in the report filters out harvesters less than $40,000, to avoid some scrap metal pieces throwing off the trends.) Regarding OEM's, Case IH didn't have a large portion of the sales this late summer, but what did sell really boosted the average values with good late model machines (8230's and 8240's).

Post-Harvest 2020 is Looking Up for Auctions

Due to some average and above-average yields around the country, higher than anticipated commodity prices, and a record year of government payments, many farmers may be looking at investing in their fleet to help offset their higher revenue this December. Our 3rd Quarter Report also breaks down the four wheel drive tractor, planter, and self-propelled sprayer sales from the last three months. The large tractors also saw a volume boost in August, but not enough to saturate the market ahead of this fall's auction season. Planter and sprayer sales in Q3 is traditionally flat, and 2020 was no exception. Sprayers are trending a little behind 2019 sales, so it will be interesting if that trend continues despite a strong auction season ahead.