This is a guest post by Jordan Clarke, Ritchie Bros. Sales Director – Saskatchewan & Manitoba.
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Been too busy to think about upgrading your farm equipment? Here are three growing trends we’ve noticed at Ritchie Bros. Auctioneers that may convince you fall is a good time to buy and sell used farm equipment.
1. Smart farmers already planning for 2016
As the growing season comes to an end, you’d assume most farmers have harvest front of mind. Pragmatic as they are, it shouldn’t be surprising to learn that most farmers in Western Canada are not only thinking of harvest 2015 but planning ahead for 2016 as well. Farmers are bringing in this year’s crop while mulling over equipment needs for next year.
At Ritchie Bros., we conduct regular farm equipment auctions at our permanent sites across Western Canada, as well as dozens of farm auctions from spring to fall. Demand for farm equipment is highest in the spring and summer, but it doesn’t slow down as much in fall as many people expect. At our Saskatoon auction site, for example, more than 3,000 people registered to buy equipment at our October 2014 auction, and more than 4,300 people registered to buy at our December 2014 auction.
Farmers are making purchasing decisions late in the year for the following reasons:
- Farmers have a better grasp on their financial situation post-harvest and are better able to determine how much profit they can reinvest in equipment upgrades.
- Making equipment purchases before the end of December is a popular income tax deferral strategy as the financial year end for a lot of farms is December 31.
- Selling prices can be typically lower at this time of year when compared to April, June or July; summer is a time of high demand and relatively high prices.
If you are planning to sell used farm equipment to generate cash flow or as part of an equipment upgrade strategy, post-harvest is an opportunity worth exploring.
What’s on the looking-ahead buyer’s list?
Late model seeding equipment like this unused 2012 Case IH SDX30 30’ air drill
High HP 4WD tractors and track tractors like this 2013 John Deere 9510R 4WD
2. Bigger farms, more equipment
As early as 2012, Statistics Canada reported a 10% decrease in the number of farms and a 7% increase in the average farm size from 2006-2011. For Saskatchewan, these numbers were even higher.
At Ritchie Bros., we’ve also seen this trend towards bigger farms play out at our auctions. The top thee equipment categories sold at our auctions in the first half of 2015 (by number of lots) were grain handling equipment (augers, bins, wagons, etc.), MFWD tractors and headers.
As farms get bigger, profit margins get smaller and farmers are looking for any way to improve efficiencies, including buying more tractors, more harvest equipment and more grain handling equipment. I recently visited a farm in Saskatchewan that runs a fleet of ten MFWD tractors, each tractor dedicated to running one specific unit.
Sellers tend to realize good returns on late model combines, MFWD tractors and 4WD tractors – something to think about if you’ve been debating whether to sell or hold. Selling your current combine or tractor while it’s full of life gives you cash to put toward more powerful and more technologically advanced units.
What’s on the big farm buyer’s equipment list?
Year-over-year, selling prices for quality farm equipment have remained strong at our auctions. Farm equipment demand peaks in summer, and prices tend to be higher. For farmers who have held off on making a move, the current market presents a good opportunity for buyers, with auction prices lower than retail and generally lower than peak summer prices. As dealers sell more new units, equipment is being pushed from farmers and dealers alike to our auctions, we’re seeing a steady influx of late-model, low-hour used farm equipment come into our auction inventory at this time of year. With the clarity of this past year’s crop on hand and the good equipment selection, post-harvest is a good time to upgrade equipment that will be needed at the start of the 2016 farming season. If you are planning to buy or sell farm equipment before the end of this year, opportunities exist at Ritchie Bros.’ permanent auction sites in Grande Prairie, AB (auctions on October 5 and November 24); Saskatoon, SK (auctions on October 15 and December 4); Regina, SK (auction on November 3); and Lethbridge, AB (auction on November 17). We are also conducting 12 off-site farm auctions in October and November, from BC to Manitoba. Thousands of items will be sold at these auctions, with no minimum bids or reserve prices, including farm equipment, farmland and more. Want to learn more about farm equipment pricing trends? Read our guest post from June 2015 or contact a Ritchie Bros. representative near you. About Jordan Clarke About Ritchie Bros. Over 21,000 farms use Farm At Hand. Join us!
3. Latest farm equipment model upgradesWhat’s on the upgrade buyer’s list?
Late model farm equipment like this 2014 John Deere 4940 120 Ft high clearance sprayer
Late model farm tractors like this 2015 Case IH 580 quadtrac track tractorEnd-of-year opportunities to buy or sell farm equipment
Jordan is a Southern Saskatchewan farm boy through and through. He spent his youth helping out on his family’s grain farm and in the family’s auction business – good training for his current role as Sales Director, Saskatchewan & Manitoba, at Ritchie Bros.
Established in 1958 in Kelowna, BC, Ritchie Bros. is the world’s largest auctioneer of equipment and trucks. Ritchie Bros. has representatives in farming communities across Canada, and helps thousands of farmers buy and sell farmland, farm equipment and more at unreserved public auctions in their area. Ritchie Bros. conduct hundreds of unreserved public auctions each year, including regular equipment auctions at 44 permanent auction sites and dozens of farm auctions. Learn more at rbauction.com/farming.