Today was going to be an interesting day on the auction market.
When I woke up early this morning to headlines of proposed Chinese tariffs on U.S. soybeans things got very real. Been talked about for a while now. What would happen if China bit back by proposing a soybean tariff? Would there be an immediate pull back spending mentality out there in farm country?
No better place to test the notion that at a nice farm machinery auction, like the one today (April 4, 2018) in Hague, ND (south-central North Dakota) for Francis and Kelly Krumm, a sale by the Steffes Group (http://www.steffesgroup.com). This auction had some very nice later model used farm equipment.
As I've been documenting since early November '17...values on good condition used farm equipment have been holding very strong right on through March '18. Very strong indeed. So the question today was would values continue to hold in the face of all the tariff/trade war news?
Yep.
The 2013 John Deere 6170R tractor with Premium cab pictured below was on the Hague, ND farm auction today. It had 1,715 hours and sold for $99,000:
$99,000 seemed fairly strong to me. Compare to 1 year old 2012 model John Deere 6170R Premium with fewer hours (1,602) sold for $88,000 on another Steffes Group auction in east-central North Dakota back on 3/8/17. Or compare to the 2015 model John Deere 6170R with only 781 hours AND a John Deere loader sold for $112,000 on a more recent 2/27/18 farm auction in south-central Nebraska.
So again, to me, $99,000 for the '13 model 6170R with 1,715 hours and no loader today...pretty strong.
Then there was the 2011 Challenger MT765C track tractor pictured below with only 594 hours sold on today's Hague, ND farm auction for $147,500:
Again, seems like fairly strong sale price to me. I checked on our http://www.MachineryPete.com web site this afternoon and found (20) MT765C's for sale at dealers all across the country. Only one was retail priced higher than the $147,500 auction sale price realized today in North Dakota. Now yes, the MT765C on the auction today had super low hours, but on a hard cash write me a check today basis...$147,500 is strong.
In fact $147,500 is the 2nd highest auction sale price ever on an MT765C tractor and also the highest auction sale price in almost exactly 5 years.
One final piece on today's Hague, ND farm auction that caught my eye was the 2008 Bobcat S330 skid steer with 1,953 hours pictured below, it sold for $32,000:
$32,000 is the 2nd highest auction sale price I've run across on a Bobcat S330 skid steer.
Today's on site farm auction in Hague, ND didn't get started until 11 AM CST. Of course plenty of small items to sell first on the sale, so now we're well past lunch time. Remember, the news of China proposing to impose its tariff on U.S. soybean news was out early this morning.
I imagine the topic came up at the auction today....before all this later model very nice farm equipment went up for bid.
Yet, today at this North Dakota farm auction at least, used equipment values on good condition stuff continued to hold very strong.
I will continue to monitor sale prices from around North America on a day by day basis. Who knows how the tariff/trade war stuff will play out. Hopefully favorably. But whatever happens on that front, the very best way to gauge how U.S. farmers are truly feeling is to monitor their check books.
Are they continuing to spend? Are they pulling back? If so, how much? Therein lies the brutal honesty of auction sale price data. What folks pay for a given asset tells the tale, up or down.
Today prices held strong.
Whether this is surprising or not, I'll leave to you. My sense is that rural America is very nervous about the whole tariff/trade war issue, but also seemingly willing to let things play out a little bit here first before altering course of their own farm biz decisions.