and starting him on what’s now a 35-year odyssey, tracking prices and monitoring the factors affecting used equipment sales. On that list are world influences, such as the increased Chinese construction in 2004 and the effect on the price of steel. In 2007, it was the rise in ethanol production, with an almost instantaneous increase in auction prices. LESSONS FROM HISTORY From 2007 to early 2013, commodity prices were strong, yet the period from the end of 2013 through 2015 saw the biggest drop in used farm equipment values he’s ever seen on late-model farm equipment. “On my one to 10 scale, just for perspective, six is what I believe to be stable or normal, but you guys know there’s no normal in agriculture,” said Peterson. “From 2007 to 2013, we were up over high eights to nine, and then we started down. At the end of 2015, it was a key point when late-model used values for two-and-a-half years fell like a rock—15 to 25 per cent year-over-year, and then they started to level out to a more normal pace.” He believes 2024 to be year one of a correction. He showed how prices fell in 2024, yet in the fourth quarter of every year— eight of the previous 22—Q4 used values have increased. In 2003, then-president George W. Bush instituted tax cuts that allowed growers to write off new or used equipment purchases. “That became entrenched in the DNA of U.S. farmers,” said Peterson, referring to the practice of lowering taxable income through the purchase of equipment. “That’s why I always said that if I were having my retirement sale, I’d have it around December 8 because that’s when it tops out.” THE DRIVERS? There have been four factors causing a long-term trend in pricing. One is dealer consolidation; 10, 15, or 20 years ago, there were more dealers. Now, there are fewer, and they don’t have five stores; they have 35. “These huge dealer groups want to do things differently than they did a decade ago,” said Peterson. “They don’t want this huge excess, and now they’re paying eight per cent interest on the 80 combines they have at their 30 stores. They couldn’t take that hit and had to move them, so they took them to auction, with big losses.” The second factor is the increased price of new machinery. Larger-scale manufacturers are facing layoffs and plant closures in an effort to hold to a set price point to help dealers ONTARIO GRAIN FARMER INDUSTRY NEWS continued on page 16 De Dell Seeds The Leaders in Non-GMO Corn When you are dealt a poor hand you rely on your partner. Let De Dell Seeds be your partner for the future. Mention this ad when placing your order to receive a free deck of De Dell Playing Cards. De Dell Seeds • 7095 Century Drive • Melbourne, ON • N0L 1T0 P: 519-264-CORN (2676) • F: 519-264-2672 info@dedellseeds.com • www.dedellseeds.com What’s Trump? CHRISTMAS CAME EARLY From the week before the 2024 U.S. Thanksgiving to a week before Christmas, Greg Peterson, known as “Machinery Pete,” attended eight auctions from Minnesota to Kentucky. Among the “gifts” he witnessed (all prices in U.S. dollars) were: • a 2013 Case IH Skid-Steer, SV250, very low hours, sold for $41,000, the third-highest auction price for a Skid-Steer; • at a farm retirement auction, Peterson saw a 2022 Brent 2596 grain cart that sold for $170,000, the highest ever for a grain cart; • a BushHog 1865e side-boom mower sold for $20,000, yet the owner told Peterson he’d bought it four years earlier for $16,000, and • a 2014 Challenger MT8645C, with 1,450 hours, sold for $341,000, a record price four years after the farmer paid $250,000.
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