Let’s take John Deere S670s as an example. In 2014 the average auction sale price for an S670 was $186,817. The first 11 months of 2015, from January through November, that average auction sale price actually went up just a smidge, to $187,557. Wow, how about that? As I said, used combine values were finally finding some footing.
Then came December.
Ouch. While in the first 11 months of 2015 I saw 37 S670 combines sell at auction, I saw a whopping 29 sold during December alone. And the average auction sale price on Deere S670 combines in December was $154,259.
That’s a different kind of wow there. Now to be fair, a number of those John Deere S670s were rice machines out of Louisiana sold at Ritchie Bros.’ very large consignment auction Dec. 16 near St. Louis. It’s tough to sell those machines when they are not set up for Midwest use. Even so, the trend of falling values on late-model used combines during December 2015 wasn’t isolated to one particular model or color.
Nope, it was across the board.
Check out the accompanying data table for some proof. These are all later-model used combines sold at auction in late November through December. Notice in the far right-hand column (Type of Auction) that the great majority of these used combines sold at wholesale auctions, so consignment, dealer or online sales versus farm retirement or estate auctions.
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The first three weeks of December 2015 saw a 37% jump in the raw number of machinery auctions versus the first three weeks of December 2014. But you’ll notice in this data table that a few late-model used combines sold at farm auctions did in fact sell very well, like the John Deere S680 with 360 engine hours that sold for $313,500 (no heads) at the Dec. 15, 2015, farm auction in west-central Indiana, or the 2012 Case IH 9120 with 844 engine hours that brought $218,000 on the Dec. 9, 2015, farm sale in northwest Minnesota.
I found another set of statistics from December to be very interesting proof of dwindling buyer demand for used combines as the calendar was about to flip to 2016. Our MachineryPete.com web site experienced a robust 16% jump in traffic during the month of December as more farmers searched for used equipment with us, thanks to our on-going multi-media promotional push. Over half our search traffic in December came via mobile cell phones or tablets, which is proof we all live on our devices these days. MachineryPete.com saw a 6% increase in mobile traffic in December to our 175+ HP Tractors category and a huge 24% spike in mobile traffic to our “planting” categories.
But there was a 14% decline in mobile search traffic to our “combines” category during December versus November.
So, a big jump in the number of machinery auctions and the number of late-model combines up for sale in December, at the exact same time fewer folks were in the used combine buying mood. That’s the recipe there for the falling values I saw on combines in December.
What does early 2016 hold for the used-combine market? Stay tuned.
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