Tuesday, August 09, 2005

Wait and see' factor can hurt summer sales

Greg Peterson Publisher, The F.A.C.T's Report

News Article originally printed at @gOnline

Judge for yourself.

I've heard lots of talk recently regarding the drought regions and how later-model used equipment -- especially big-ticket items like tractors and combines -- will sell on farm auctions there. Will there be buys? If so, how much cheaper will stuff sell?

Well, on Monday of this week a nice farm auction was held in northern Illinois. It featured a dandy 1996 model JD 7800 mechanical front-wheel-drive tractor with 2,335 hours on it. It sold for $48,500. See how that stacks up against other similar JD 7800 tractors in the data table on the following page.

Sometimes I think that at late-summer auctions held in the Midwest, you can have a bit of the "wait and see" factor hurting auction sale prices. As in, "Hmm, maybe I'll hold off going after that piece of equipment right now until we see how yields come in."

Then, consider the fact that this sale was held in an area hard hit by drought, and you can multiply this "wait and see" factor by two or three times. Understandably, the result is usually lower sale prices.

Which is tough luck if you are the seller, but presents tremendous opportunity if you are a buyer looking in the used market. The key is knowing where these "soft" spots are. A few years back it was western Nebraska and western Kansas. If you know where stuff is selling for less, then the only hurdle left becomes finding out about available equipment in these areas.

I see in our "auction locator" database in our Web site, a 2001 model Case-IH MX240 MFWD tractor with 520 hours is coming up for sale in Salem, Illinois, at an August 6 farm auction. Wonder what it will sell for?

We'll be there to find out.

Greg Peterson Publisher, The F.A.C.T's Report