New Tech Old Planters: The Birth of a New Industry Trend

The Planter Market has been a rollercoaster since 2014. Four years ago, if you had a planter larger than a single row you had a hard time getting rid of it. Like other equipment segments, planters were highly produced and the market was flush with inventory. Used planters had piled up on Dealer’s Lots and the Auction Market was the new place to buy Used Planters. Week after week auctions bill where loaded with planters. They were everywhere! Of all the equipment in the last 5 years, planters took the worst beating. New planter sales fell from Highs of 50-60 to even 100 per year to lows in the single digits. Planters were being rebuilt instead of trading for new. High speed technology was introduced from manufactures but “Bolt On” equipment had been available for several years at this point. Older planters started getting a face lift with new high speed technology.

As a Remarking Manager, my job is to look for trend in Used Equipment. With the current Farm Economy, Precision Planting and Retro Kits are increasing in popularity. Used Planter Inventory are at all-time lows. With that being said, the value of used planters have not changed. Used planters, pre-high speed technology, have remained the same for the past 3-4 years. Planter values, at auction or retail, have held steady with no real sign of change in the near future.

If you spend any time on “Ag Twitter” it’s not uncommon to hear the term “Precision Donor” tossed  around. End users have created a demand for old planters. The odd part is the demand has not created an uptick in price. These users are looking for a cheap planters to retrofit with new “Bolt On” High Speed Technology. End Users see the benefits of High Speed Technology. There are test plot after test plot showing the results of stand, reduced seed population, and add efficiencies in the field. All of which is driving profit to the bottom line and in the current environment every little bit counts.

Demand for the older, per 2012 planters, is real. The drawback is price. End Users are looking for a $25,000, or less, something to spend $50K plus on and have $75,000 planter that will compete in performance with a $250,000 – $300,000 planters. I am not saying that installing High Speed Technology on and older planter will give the same planter as new but, it is darn close. The landscape is ripe with shops who specialize in doing just this thing.

Aftermarket Technology, like Precision Planting, is not new to the market. Due to the down turn and higher trade differences, solutions like these have become popular. Producers are looking for bang for their buck and these solutions are providing the bang. So, with this all being said how does this effect the Used Marketplace? I think the Jury is still out. Planters have always been a one-off type of machine. Every setup is specific to each Producer. What one loves the other hates. I have to think this will carry over to the “Bolt On” Market. The investment in this technology, in my opinion, will have the value the next buyer deems it worth. What will a $50,000 investment yield after the new wears off. Only time will tell and it could be less thanks you think!

If you want to hear more topics like this tune into Moving Iron Podcast where this very topic has been has been discussed. Regina Narges, Aaron Fintel, and Myself talk about the latest trend in the Ag Equipment Marketplace. Make sure to visit MovingIronLLC.com for more about the Ag Equipment Industry. So, until next time, let’s go move some iron.

Has the Auction Market Become the New Retail Buying Market or is Supply and Demand Driving Pricing at Retirement and On Farm Auctions?

It is not a shock to anyone when I say the last five year auction activity has greatly increased. At the end of 2014, Used Equipment Inventories where at all-time highs. The Auction Market became a dumping ground for all kinds of equipment. Late model, high hour, and everything in between. There was nothing sacred. The use of the auction market is still strong today with Dealership Liquidations, Farm Retirement Sales, and Farm Liquidation. With large amounts of equipment selling on the open market; has the buyer become more retail minded at the auction? In this article, I will give some examples supporting auction activity and Retail Pricing at Dealerships.

When it comes to pricing Used Equipment everyone is wrong! You just hope you’re less wrong than the next guy. I don’t think anyone is predicting the market to the penny and the day something will sell.  That’s what makes it fun. The whole art and science approach. Some days I am scared to death when I value equipment and some days I feel like I have nailed the market. I do my fair share of price reductions, write-downs, and yes I have to use auctions. All of which I was certain I had priced correctly the first time.

With that being said, I also have equipment that is not moving or slow to move with retail pricing within a plus or minus 5%-10% range of auction values. At the end of the year I saw auction values within the expectable retail range on like equipment, especially combines, 4WDs, and Row Crop Tractors. I am still seeing the same auction values for the start of 2018. I watched an auction in Illinois in Mid-January, this was a retirement sale and it was good equipment. In this auction, a 2015 612c Corn Head, it had the necessary work done; chains, sprockets, ect. It sold for $49,000.

110 miles away sits 3, 2015 John Deere 612c Corn Heads. These heads are in good shape and have a retail advertised price of $44,900. The three heads on the dealer’s lot for $4100 less and no negotiations have taken place. I know the dealer and they are a first rate group. The heads are in good shape and should be ready to work. Why are they still there? What was it about the auction head the buyer was willing to pay $10,000 more for?

That is just one of many examples I could give with similar outcome. The auction results I am looking at are showing trends of 2015 and older model year equipment and selling as strong or stronger at auction compared to dealer sales data. I don’t think it is a supply demand thing as much as a preference of buying thing.  2015 MY and older the Retirement Auction market seems to be preferred to the dealer’s lot. Another example was of a 8400 2000 hours tractor that sold at a Retirement Sale for $100,000. I am speaking for myself but, I would be hard pressed to obtain a value this high. I not saying it couldn’t be done, just very hard to make happen. This is surprising considering all of the extras the dealer can offer. For example, low rate financing, extended warranties, and they will take trade ins. That’s not to say auctions won’t put your machine on the next auction either.

The other trend I have noticed is machines newer than 2015 are still showing a very strong retail value compared to the older machines.  For the most part these machines are not as abundant as older models and dealer used late model and low hour equipment inventories are shrinking. It is hard to find these machine at dealerships, much less auctions.

In closing, trends are all pointing to more on line purchasing. The incoming generation of decision makers have sent either half or all of their life buying and bidding purchases on line. It is very acceptable to buy a tractor or combine online sight unseen by taking the word of someone they spoke to, the description they read, and the pictures they look at. It seems these days, the interaction of the sale is done more through text and email then a face-to-face interaction. The scope of the customer is rapidly changing and the dealer will need to change as fast or faster to stay relevant to the customers wants and needs. If you would like to hear more conversations like this tune in to Moving Iron Podcast and read Moving Iron Blog. They can be found at MovingIronLLC.com. So until next time let’s go move some iron.