Published on 3/1/2017
The used farm implement market is diverse and often difficult to gauge as a bellwether for the overall health of the general machinery market. But, like the used tractor market, there are steps buyers and sellers can take to successfully navigate the process, secure necessary equipment and get the best out of both sides of the transition.
A few segments of the implement sector have seen a resurgence in overall sales on the used market since mid-2016, with some of those sales numbers bucking a trend of decline. In the fourth quarter of last year, for example, used tillage equipment sales perked up for the first time in almost two years, says used farm machinery expert Greg "Machinery Pete" Peterson.
"The fourth-quarter results break a string of seven straight quarterly falling index ratings," says Peterson of his Used Machinery Index report tracking sales each quarter that indicates the first increase in used tillage equipment sales since the first quarter of 2014. "But, the November-December timeframe is the best time of year to sell, and our data shows that's when prices are historically strongest."
The same is true with large, self-propelled sprayers; heading into 2017, there was a lot of inventory around the country, and with well-maintained machines, Andrew Pyron, CEO and President of BigIron Auction Company that conducts ag-focused online weekly auctions, says he's seen that inventory start to fall in areas where they're greater necessities for producers.
"We saw a lot of them sitting, particularly the year before last and last year," Pyron says. "Maybe I'm being optimistic, but I think dealers have worked that inventory down."
Factors influencing a diverse market
Implements as a general category are difficult to gauge because of a lot more variables in play versus a market like used tractors. Machines like tillage equipment, sprayers, air seeders and planters are necessities on a lot of farms, but every farmer has different needs. It's a market in which it's important to account for geography, seasonality, crop variability and farm size in making buying and selling decisions.
"The implement market as a category is very seasonal," Pyron says. "Being such a broad category, you can go to southern Georgia, eastern Iowa or western Nebraska and there are always implement needs. But, it can be difficult to compare apples to apples."
That's where Pyron says the online marketplace for used machinery offers value to both buyers and sellers. It removes geographic proximity from the sales process, providing sellers a broader pool of potential buyers, and providing those buyers a wider selection across a larger geography.
"The online marketplace can give farmers a more convenient venue, and many are working to establish brand identities and value propositions that both buyers and sellers can depend on," Pyron says. "Service is important, just like with any good retail dealer."
Machinery quality
Whether buying or selling used implements, overall equipment quality and a proven history of attention to maintenance are major factors, just as they are in the used tractor market. Though with equipment like self-propelled sprayers, the number of hours is slightly different than with tractors, it's just as important to be attentive to overall use before buying or bidding.
"The line tends to be under 5,000 hours. If the machines have been well-maintained, parked in the shed when not in use and has good tires and boom components, sellers are typically rewarded and buyers get a machine they can rely on."
Though it's more diverse than the used tractor market, success in buying and selling in the implement category depends greatly on the same basic variable: Buyer confidence. The assurance of continued functionality and durability of any used machinery, including tillage tools, sprayers, planters and seeders, is more important today than it ever has been, with farmers watching budgets closely as grain prices strain margins. That assurance goes a long way to building confidence that, in the end, is the key driver of used implement sales.
"Buyers show their confidence with their pocketbooks, especially if they can tell sellers are putting energy into maintaining their equipment," Pyron says. "It's all about that confidence factor: If a buyer can look at a piece of equipment to kick the tires or talk to the owner and/or his representative and verify that there is still value in it, that's huge."
Farmers can be confident in AgDirect as a financial partner for machinery purchases. We're dedicated to agriculture and offer myriad financing options to fit any operation, whether buying used or new machinery. We offer financing for buying, leasing or refinancing, with fixed- and variable-rate terms from two to seven years. We also offer delayed payment plans with no prepayment penalties.
Want to learn more? Contact your nearest AgDirect representative!