$50K is the Magic Number in Used Equipment Market Right Now

$50K is the magic number.

Stay under $50K and if the used farm equipment item is in good condition...it will sell well, sometimes very strong. Start drifting farther above $50K and well, now we're bringing into play more of the exceedingly negative ag news of the day, i.e., Trump's Trade War ("Easy to Win"), falling commodity prices, Spring flooding, big grain surpluses, etc.

There has always been a "magic number" in the used equipment market, the "Limbo Bar" I've always called it. No matter what's happening in the ag economy at any given time, there's always that $$ level that if you stay under, competitive bidding on good condition used items. I remember back in late 2007 - early 2013, there were times my Machinery Pete "Limbo Bar" $$ line approached $100K.

Not now. $50K is the bar.

Again, to be clear here, what I'm saying is that $50K is the current dollar line which if you stay under and are selling a piece of used farm equipment in good condition, buyers are there, used value holding. This doesn't mean nothing over $50K will sell well in this used market. No, not that at all. It just gets tougher and tougher to find those buyers the farther you go above this $50K mark. Very good condition used items in the "big ticket" equipment categories have been doing pretty well here in '19 up through April, particularly if they were in that 8-10 plus year old age range (favorable comparison vs rising cost of New) and also in the 1-3 year age range if still under warranty. But if a big $$ ticket used equipment item and not in the greatest condition....softening now. 

A good recent (very) example of the $50K magic line was the 1989 CaseIH 7120 2WD tractor with 5,366 hours sold last Thursday (May 9, 2019) on an online farm auction in Park Rapids, MN by our good friends at The Steffes Group (http://www.steffesgroup.com). Here's a picture of it:



It sold for $41,500. That is the highest auction sale price on a CaseIH 7120 2WD tractor in 44 mo. Had to go back to September 12, 2015 to find one higher...a beautiful 1991 model 2WD 7120 with only 2,149 hours sold on a farm auction in Windom, MN by Dan Pike & Associates Auction Co. for a whopping $67,000. Here's a picture of that $67K beauty:




Back to the '89 7120 2WD sold last Thursday with 5,366 hours for $41,500...a smidge under that $50K current magic number / Pete's limbo bar.

 That same Park Rapids, MN online farm auction last Thursday actually had a 2nd CaseIH 7120 2WD tractor on the sale, another '89 model, but with higher hours (8,690). It sold solid for $27,000.



"Tractor Specs" on CaseIH 7120's: https://www.machinerypete.com/specs/case-ih/7120/5673

Here's link to view (15) CaseIH 7120's for sale today: https://www.machinerypete.com/tractors/100-174-hp/case-ih/7120