Lot of attention been paid this year to what 2021 - 2024 model Combines have been selling for at auction. Quite the drop from brand new asking price no doubt. Big $$ Gap.
But our Machinery Pete auction price data is shouting the fact that very large depreciation hit is smacking older 5+ year old models. Check out what I mean with this look at Avg. Auction Price Drops so far this year on John Deere S600 Series combine models, made from 2012 - 2017.
Of course the softening ag economy throughout '24 has farmers generally pulling back, understandably watching available dollars tightly. But an even bigger factor when it comes to the used Combine sector has been the sheer VOLUME of used units hitting the auction block going back to Summer of '23.
The flood of used Combines hitting the auction market in '24 has been…Unprecedented.
Last year as large scale farm equipment dealers began their effort to pare down their used Combine inventory levels on their lots I saw (99) 0-3 year old Combines sold at auction during Q2 - Q3 '23.
How many 0-3 year old Combines sold at auction Q2 - Q3 '24? (207). That’s a whopping 109.1% increase vs last year in No. of 0-3 year old Combines sold at auction Q2 - Q3. And how about this for perspective…back in 2014, the first full year of the biggest downturn in used equipment values I’ve seen in my 35 Years tracking auction sale price data there were only (37) 0-3 Year old Combines sold at auction back then. That figure jumped up to (129) Q2 - Q3 2015 as dealers ramped up their efforts to pare down used Combine inventory.
It’s just happening AT A MUCH FASTER RATE here in '24. Again, 109.1% jump in No. of 0-3 Year old Combines sold at auction Q2 - Q3 '24 vs same period last year.
Looking ahead watch for dealers to be UBER AGGRESSIVE during November - December '24 continuing to push excess used Combines (also high HP Tractors, Planters) out to auction to try and take advantage of the annual Year End Tax Motivated (IRS Sec. 179) Force of farmers looking to buy equipment year end to help push down their tax bills.
Only once in the past 20+ years has our Machinery Pete auction price data seen a drop in used equipment values during Q4. What Year was that?
Anecdotally I have been hearing from more and more farmers who have been intently paying attention to these recalibrating used Combine (Tractor, Planter) values throughout '24 and situationally have been aggressive buyers, perhaps even if they weren’t necessarily in the market to buy.
…but…if I can pick it up for $___ that price. Deal.
Could be good time to look to be a buyer here year end '24 into '25. Particularly when you look at the big picture Supply & Demand situation with used Combines. This Supply (Blue) and Demand (Orange) chart is from the back end of our www.MachineryPete.com web site. The chart covers the past 2 years, so Oct. '22 on the far left, Oct. '24 on the farm right. Note how Supply (Blue) working downward of late (Dealers smashing used Combines out to auction) while the Orange Demand line (farmers shopping for used Combines) has moved upward as harvest time approached.
SUPPLY & DEMAND TREND ON USED COMBINES
Pete
Machinery Pete