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Spring auctions for trucks, farm equipment start strong

What’s hot and what’s not in the first half of the spring auction season

After several years of robust sales of new equipment, the used equipment inventory across North America has grown a lot, because of all the trade ins and lease returns flowing back to dealers. Combine that fact with the current slowdown in demand for new machines, and many people in the equipment industry had been wondering where the auction sale market would pick up this season.

Some, including Simon Wallan, Ritchie Bros. VP of agriculture for Western Canada, were expecting a downturn in prices and demand. But initial sales this season suggest the market is still relatively strong.

“We started off late last fall, early this spring being conservative with some of our estimates,” he says. “But it hasn’t seen much change and certain categories have strengthened. We’re about 50 per cent of the way through our spring auction sales now and the pricing is continuing to hold and the interest is continuing to hold.”

Among the negative market adjustments that have occurred is a weakening demand for swathers. And sale prices for seeding equipment have become a bit unpredictable.

“Maybe the best word to use is erratic,” he continues. “It’s a buyers’ market out there for seeding tools. Every farmer out there seems to want something different in a seeding tool, so we are having trouble finding consistency when it comes to size and specifications.”

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Kim Kramer of Saskatchewan-based Kramer Auctions Ltd. has noticed some differences in the marketplace so far this season as well.

“Guys this year are more selective,” he explains. “Bidders in general have pulled their horns in on some items but not others. I think a lot of that is due to more selection at dealerships and auctions. One guy told me at an auction sale yesterday, I’ve bought so much machinery there’s no sense of urgency anymore that I need to buy it today or I won’t find another one. There are lots available. (Buyers) are not pushing the panic button like in previous years where they’d get in a bidding war because they were worried they wouldn’t find another one.”

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Livestock-related equipment, including loader tractors, is one of the hot spots when it comes to demand this season, with stock growers apparently in the mood to spend some cash. And combine values continue to hold their own.

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One thing driving prices higher in some equipment categories now is pre-emissions engines. Those machines and trucks with diesel engines that do not have any of the latest emissions control systems are seeing strong demand.

“Trucks, anything pre-emissions, I bet they’re up a good, solid 20 per cent,” says Kramer. “A pre-emissions Kenworth or Peterbilt, those brands, they’re a really strong sale.”

Wallan agrees. “When it comes to truck tractors, anything in good condition with a pre-emissions engine is very, very sought after,” he adds. “It doesn’t matter what sale you’re at, a farm sale or an industrial one.”

In general, four-wheel drive tractors seem to be holding their values compared to last season, and in some cases prices are up a bit. But Kramer says he hasn’t seen prices of late-model machines being pulled up as much as some expected because of the U.S. exchange rate, which is really pushing up sticker prices on new tractors.

For four-wheel drive tractors just a couple of years old, Kramer thinks the availability of certified pre-owned programs from dealers on similar machines may be putting some pressure on auction sale prices, making some late-model tractors “a good buy.” And, again, anything with a pre-emissions engine generates a lot of interest.

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“For a tractor, maybe a Tier 2 without the emissions controls, they’ll bid way stronger on it,” he says. “Guys are saying they can buy an older tractor, as long as it has the horsepower and the hydraulic power, it will do the same job as a new one.”

When it comes to sprayers, Kramer has seen some softening of prices, which he also attributes to a larger selection of used models now available to buyers. Wallan says he believes the strongest demand in sprayers has shifted away from the more mid-range models to the largest, highest capacity versions.

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Wallan says the bulk of his company’s sellers so far this year remain farmers who are leaving the business rather than inventory dispersals from dealers, and the number of machines at auction this season remains relatively consistent with previous years.

In case you haven’t been able to make it out to any sales, we’ve tallied up some of the selling prices we saw by mid April in the accompanying charts to give you an idea of where things are so far this year.

About the author

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Scott Garvey

Scott Garvey is a freelance writer and video producer. He is also the former machinery editor at Grainews.

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