An interesting combine auction

I like to keep a pulse on what is happening in the auction market. Every month I normally look at combines, row crop tractors, and sprayers. Last week, one sale stood out to me more than others. Not because of value; rather, the diversity of the mix. 

The auction I am speaking of is the Big Iron auction held on June 17, 2024. This was a no-reserve dealer and farmer auction with 22 combines listed for sale. The mix was as follows: 10 Case IH, nine John Deere, two Fendt, and one Claas. The machine auction values seemed to be in line with other auctions as well as the number of bidders, but what I found interesting was the parity in price. 

Sale price vs. original list price

When considering the sale price as a percentage of the original list price, I found the results of the auction interesting because of the closeness among manufacturers.

For example, a 2022 Claas 8700T had an original list price of $918,160 and sold for $396,250, making the percentage of list price 43.2%. In comparison, a 2022 John Deere S780 with a list price of $686,267 and sold for $331,250, making the percentage of list 48.3%. A 2023 John Deere S780 had a list price of $848,364 and sold for $370,250, making the percentage 43.6%. The late-model, low-hour machines all fell within 5% of each other. 

The next group of machines that stood out were the 2021 and 2019 models. The 2019 group is made up of five machines and again they have relatively tight tolerances. Three manufacturers make up the group and the average percentage was 28.8% of list price, making all of the machines plus or minus 5% of the average. There were two 2021 machines on the sale, one John Deere S780 and one Case IH 8250. Both were Class 8 combines and they sold within .8% of each other.

A saturated market

So why is this important and what does it mean? These are symptoms of a saturated market. The market has been driven down in price and now shoppers are looking at hours and condition more than brand. These machines averaged 203 bids apiece, with a range from 124 to 265 bids per machine so bidders came to buy. 

Buyers also know there isn’t a lack of equipment in the market and they can be patient. They can wait to find the exact machine they have been looking for and more than likely they will also find the price they are looking for as well. 

The issue that comes with a buyer’s market is just that. When the buyer is looking to upgrade their machine they have one to move as well and the same rules apply when selling as when buying: What will the market bear and at what speed will it move? 

The combine market, in my opinion, is close to the bottom and these auction values are a good indicator. The wild swings in combine auction values have slowed and now the retail market is finally coming into line with tighter auction to retail ratios. For the first time in a long time I have more confidence in the combine market than I do in any other used equipment market. I think 2024 will continue to see slides in values, but I am not sure it will be with combines. 

For more on used equipment, listen to my episodes on the Successful Farming Podcast on the last Monday of each month. Aaron Fintel and I explore current market conditions and factors driving used equipment. Please tune in to the Moving Iron Podcast, where I track the economic drivers of the farm equipment business, and check out movingironllc.com for everything related to Moving Iron LLC.