26 Successful Farming at Agriculture.com |August 2018m a c h i n e r y INSIDERª Continuedupcoming auctions of noteAUGUST 28: A preharvest consignment auction is scheduled
for Marion, South Dakota, by Wieman Auction (wiemanauction.com).COMBINE ASKING PRICES DO
MIRROR CROP VALUES
AUGUST 30: A two-day sale of trucks, farm equipment, and
livestock equipment will be held in Elgin, Oklahoma, by Bridges Auction
(bridgesauction.com).AUGUST 10: TAC Enterprises (tactractors.com) will be
holding its quarterly farm equipment sale in Moulton, Alabama.AUGUST 8 & 9: The two-day Empire Farm Days Auctions
will be conducted by Roy Teitsworth, Inc. (teitsworth.com) at Seneca
Falls, New York.Your best tactic if you are looking to upgrade combines
or add a second or third harvester is to track prices such as
those given in the Pocket Price Guide or the price averages
given on Deere combines on the previous page.GET TWO FREE
EQUIPMENT
APPRAISALS
What’s It Worth?
Be sure to cash in on your two free
equipment appraisals by going to
Agriculture.com/whatsitworth.
These free appraisals are based
on actual dealer sales, auction purchases, and wholesale transactions on
selected equipment built in the last 20 years. Used by banks, equipment
manufacturers, and equipment dealers all over North America, the Iron
Solutions equipment appraisal data is now available.
AUGUST 29: Steffes Group (steffesgroup.com) holds its
AgIron Sioux Falls Event in Larchwood, Iowa.By David Davidson, Product Manager, IronSearch.comI
t seems like the price of everything goes up, doesn’t it?
Commodities like corn may seem to be the exception. It’s been
seven years since we’ve seen $8 corn in the peaks of 2012. If you
study the long-term price trend going back to the 1960s, however, it
becomes easy to see that, in the long view, this increase does play out.
We’ll come back to corn price in a minute. Let’s look instead at the
trend of new selling prices of class 7 combines back to 2010. The
analysis here is on the average new selling price of class 7 combines
from 2010 to 2018 (adjusted for inflation). There are some dramatic
swings in the percentage price change each year on new selling prices.
In 2012, the average selling price was a whopping 13% higher than
the prior year after adjustment for inflation.
Wait, wasn’t that the year corn spiked to $8?
Yes, it was. Some years revealed a decline
in the new selling price of these combines.
The average new selling price in 2016 was
down 4% from the prior year. Also in 2016, the
average annual corn price for the year was its
lowest since 2010 at $3.60.
When you lay the annual percentage price
increase over the corn price, there does
appear to be a correlation.
However, while commodity prices are
likely a large influencer on new combine
prices, there are other factors at play, too.
Among the factors in the backdrop of thisperiod were governmental mandates like Tier 4 diesel engine emission
requirements and changes in Section 179 write-off amounts. New
features and models from the manufacturers also come with price
increases. Many factors are involved, but commodity prices are very
likely a large influencer on new combine prices. At the time of this
writing, corn was at $4.50, levels not seen since spring of 2014. Will
the price of corn hold up? If so, might we see new prices of class 7
combines on the rise again?
Strong correlations like commodity price and new equipment
price apply to used equipment values, too. If farm commodity prices
increase, you may see the resale cash value on your equipment hold its
value more than normal. Consider tracking the value of your equipment
assets over time to spot these trends on your own assets.
Check out your equipment value today and quarterly as factors
change. You can do this with the free online appraisal tool on
Agriculture.com. If you need a more detailed appraisal for a fee, go to
IronAppraiser.com.New Combine Price Increase Compared to Corn Price
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%