I’ve been covering machinery auctions for over 27 years. Of course there are different types of auctions. You’ve got the traditional on-site farm auction, which could be a retirement auction or an estate sale. Then there are the wholesale-type auctions, including the common regional consignment sales we see all over the country. On-site dealer auctions are also in the mix and of course online auctions have grown tremendously over the past few years, both online consignment auctions and online farm auctions and online dealer auctions.

I’m sure too it’s no surprise to you hear me say that over nearly 3 decades tracking auction sale price data I’ve found “farm” auctions tend to produce the strongest sale prices. This makes sense. At an on-site farm sale, the local folks know Joe Farmer, know his reputation, can see his farm and how he cared for his equipment. Good condition used equipment on a farm retirement or estate sale conducted by a reputable auction firm that advertises widely tends to produce strong prices.

But of course there are other types of farm auctions.

One type I’ve been seeing much more of here lately are farm liquidation auctions, sales driven by the lender pulling the plug on a farm operation. We know that ag lenders have been squeezing in tighter here the past 6 months or so leading into the 2017 season that once again looks to be profit challenged. I think what we’re seeing here is a delayed reaction to the tightened lending restrictions enacted with the July 21, 2010 passing of the Dodd-Frank Act in Washington. That legislation was aimed at banks operating too loosely, which helped usher in the Great Recession in 2008-09.

Of course, 2008-10 was Go Time for us in the ag sector as commodity prices were high, as were farm equipment sales, farm land sales, everything in ag was up, up, up. Not so now and those tighter lending laws now squeezing in on ag lenders, hence the uptick I’ve been seeing in farm liquidation auctions. Outside of full liquidation auctions, this winter I’ve also seen auction sale bills referencing … ”Farm Restructuring Auction.”

I hadn’t seen that before.

Back to the farm liquidation auctions, we can further parse these out. Sometimes good farm operators with great reputations run into hard times and have to liquidate. Sale prices on those auctions historically have been strong. Where I’ve seen weaker/softer auction prices over my 27 years tracking prices have been on farm liquidation auctions for farm operations with, shall we say, not as rosy reputations for whatever reason. Sometimes they’ve been perceived locally to be overly aggressive in their approach, paying aggressively high cash rents, creating some bad local vibes along the way.

Sale prices on liquidation auctions for those type farms with negative local vibes have proven to be historically “softer” in my 27 years of tracking sale prices.

But very interestingly, it’s not so much here lately.

Yes, I saw a noticeable uptick in lender forced farm auctions during the last half of 2016 into early 2017. Given the tough profit challenged ag environment we’re stuck in here now for year 4, you’d expect we’d be seeing softer/weaker auction sale prices, particularly on the very large farm liquidation auctions with bad local vibes surrounding them.

That’s not what I’ve been seeing. Not yet anyway.

A perfect example was a huge farm liquidation auction Feb. 24, 2017, in central Ohio. The name of the farm operation liquidating was “Movers & Shuckers.” The story I heard was that name was a play on words by the owners who were younger in age and got into farming in a huge way, with big financial backing, right at the tail end of the good times back a few years ago. This farming operation gobbled up land, paid very high cash rents and sounded like from chatter on farm discussion boards, were very open in talking of how they were going to do it bigger and better.

As you can imagine, they were not exactly endearing themselves to local farmers.

But under they went and their huge farm liquidation auction was in February in central Ohio. Four John Deere 8360R tractors up for sale, a pair of S680 combines, plus tons more late model equipment. So, sale prices had to cut on the low side, right?

Nope.

Example A was the 2016 John Deere R4045 sprayer with 216 hours. It sold for $317,500. I know, wow, right? Here’s video of it selling:

How high is $317,500 for that piece of equipment? Well, if you look in our Machinery Pete “Dealer Center” dashboard analytical data, you’ll see the current average dealer list price on a 2016 John Deere R4045 Sprayer is running just over $329,600. So there is hardly any separation between the hard cash auction sale price paid (on a huge farm liquidation auction) and dealer asking price on lots around the country.

But I will say that we did see a noticeable overall uptick in auction sale prices on good condition self-propelled sprayers in the first 4 months of 2017. This correlated exactly with the surge in search traffic we saw on our www.machinerypete.com website for used self-propelled sprayers for sale.

The higher than expected auction sale prices I saw on that “Movers & Shuckers” farm liquidation auction in Ohio were echoed by similar slightly higher than expected sale prices on the other large farm liquidation auctions I attended around the country early in 2017. It sort of felt like with things tight and sales of new being slower for a while now, more collective focus lasering in on finding and acquiring the very best condition used equipment available, hence the stronger prices paid for the good condition stuff at auctions.

Will these trends hold through spring 2017 into summer? Stay tuned.