Used Combine Values and What the Recent AHW Dealer Auction Can Teach Us

Used combine values are a big concern for many this year.  This is especially true going into the high demand August market with a tight supply of farm equipment. Just last week we saw a significant sale with Sullivan’s AHW dealer auction on June 15th. The listing was heavy with harvesting combines, draper heads, plus a few late model tractors and sprayers. This auction provides a great look at the market’s direction when analyzed with our Iron Comps database.

With over 60 lots of AHW’s equipment sold, we chose just a few significant pieces to test against the current trendline. Used combine values may be the most intriguing for dealers to look at now so they can gauge what the market may look like in August during prime selling season. For those interested in tractors, headers, and self-propelled sprayers, I’ll be diving into those in some upcoming analysis. The good mix of both Hagie and Case make for a nice brand comparison of sprayers!

Case-IH 2377

Harvester sales at this Sullivan auction ranged from $61,000 for a 15 year old Case-IH 2377, to a 2018 John Deere S780 2WD valued at $288,000. In addition to studying these bookends, a 2017 S680 4WD was analyzed. It has relatively low hours and some bells and whistles worth looking at.

The 15 year old Case 2377 may temper an overly bullish outlook on this market. With just over 2,000K separator hours, this would have justified $55,000 based on the Separator Hours vs Price graph which trends 2019 and 2020 values shown below.

Case IH 2377 Used Combine Values
Iron Comps Values Case IH 2377 Combines

10% above expectation may seem bullish, but compare that to the most recent sale where a 3,000 sep hour model sold for $67,000. This reaffirms what we have been sharing about late 2020 and early 2021 sales. Most older machines are seeing a flat or modest single-digit year over year increase in expected values.

If you caught our 5 Trends for Equipment Dealers webinar last month, you will recall that used combine values had not yet seen the post-pandemic bump that tractors have been experiencing. Some of this delay may be due to the void of late-model machines on the market. This theory was tested with a relatively young 2018 John Deere S780 at the AHW auction, which brought the top combine value of $288,000. We will dive into that next.

John Deere S780

The entire auctioneers description for this S780 is as follows:

2018 John Deere S780 2wd combine, ProDrive trans., ContourMaster feederhouse w/CommandTouch 5 spd. drive & hyd. fore/aft, 28.5′ unload auger, PowerFold bin extension, chopper, PowerCast tailboard, Active Yield, 650/85R38 drive tires and duals, 750/65R26 steer tires, LED lights, premium cab, 10″ display w/AutoTrac, Turn Automation, Data Sync, Implement Guidance, In-Field Data Sharing, Machine Sync, RowSense & Section Control activations, 899 eng./640 sep. hours, SN 1H0S780SJJ0801614

Our Tractor Zoom database has a significant number of these S780 for a quality comparison. In the  bottom bar graph below you can see a slight year over year average price increase in the S780 values. Because of all the variables in play we need to look at closer comparables to truly judge market movement. In the top graph, the orange square represents where this AHW combine ranks in terms of separator hours and sale price.

John Deere S780 Used Combine Values
Iron Comps Values of John Deere S780 Combines

Our AHW S780 is on the top end of expected values for its hours when compared to the past three years. High, but certainly not an outlier. Below we drill down even further into a look at two specific comparables. The first screenshot of Iron Comps Auction Results surfaces the most recent sale dates and closest hours. This view indicates that used combine values may have hit a ceiling.

John Deere S780 Combines Sold In 2021 Between 500 And 700 Sep Hours

However this does not indicate the market is reversing by any stretch of the imagination. Below the next image narrows down the search to the two closest sep hour comparables. Both sold in the combine flurry that was last August of 2020.

John Deere S780 Combine Between 600 And 700 Seperator Hours
John Deere S780 Combine Between 600 And 700 Separator Hours

You can see how much values have risen in just a year. From $249,000 average last year to $288,000 for this auction. A 15% jump!

John Deere S680

We have explored the top and bottom of used combine values in this auction. Approximately a 15% to 10% increase is seen, respectively, over last year. Let’s open it up and see if a mid-hour combine falls somewhere in between. A 2017 John Deere S680 4WD sold for $186,000 with just over 1,000 separator hours. Below is the full auctioneers description:

2017 John Deere S680 4wd combine, ProDrive trans., ContourMaster feederhouse w/CommandTouch 5 spd. drive & hyd. fore/aft, 26′ unload auger, chopper, PowerCast tailboard, bin extension w/tip-ups, 520/Interactive Combine Adjust, ActiveYield, LED lights, premium cab, 1,445 eng./1,071 sep. hours, SN 1H0S680SPG0795113

Comparing our S680 with other 2021 sales, the value is in line with others in the TZ database. A great comparison, pictured below, sold in late March of 2021 at a consignment auction in Minnesota for $200,000.

John Deere S680 Comparable Value for $200,000
Iron Comps S680 Combine Values

While this comp does have a refrigerator, the other options are similar and reinforce the theory that 2021 values may have hit a top and stabilized for now.

Iron Comps has the ability to filter by hours and auction type. Using this we can slice data to consist of only S680’s between 900 – 1100 hours sold at dealer auctions. Contrasting these historic equipment values, this AHW combine’s sale price exceeds 2019 and 2020 values by about 30%.

Comparable John Deere S680 At Dealer Auctions Between 900 And 1100 Hours
Comparable John Deere S680 At Dealer Auctions Between 900 And 1100 Hours

Used Combine Values in 2021

Big movements in used equipment values tend to coincide directionally with significant commodity price changes. With the exception of wheat, current cooling of the corn and soybean markets may be tapping the brakes on the rising used equipment values we have been riding over the past eight months. Another major factor at play will be the necessary demand of combines prior to this fall. Will a tight new and late model supply force prices even higher? Will downward pressure of the grain markets have any effect?  To answer these questions keep your Iron Comps app open and your eyes on the most recent sales!

Farm Credit Makes a Digital Transformation with Iron Comps

Compeer Financial Blog Header Image Small

An open mind, industry knowledge, and a commitment to excellence are driving innovation at Compeer Financial

Mike Morris, VP of Appraisal for Compeer Financial, is well-known in farm appraiser circles in the Midwest, and within the Farm Credit System. He was recently named to the IL Society of Professional Farm Managers & Rural Appraisers hall of fame and currently serves on the Real Estate Appraisal Administration and Disciplinary Board for the State of Illinois . He also spent 10 years on the board (serving one term as president) of the IL Coalition of Appraisal Professionals, too. At first glance, his accolades could make people think he’s an industry vet sitting at a big desk behind a sign saying “This is the way we’ve always done it.”

In fact, nothing could be further from the truth.

Will the real Mike Morris please stand up?

The real Mike Morris? He’s an industry innovator.

In 2017, 1st Farm Credit Services, AgStar Financial Services, and Badgerland Financial united as Compeer Financial. Mike was tasked to lead Compeer’s appraisal efforts. His mission? Develop innovative solutions to do better for their clients – American farmers.

“In Compeer’s pursuit to provide the best possible service to our farmers, we knew we had to be continually looking to improve and innovate. One of the first challenges that I had running the real estate and chattel appraisal groups was, ‘How do we tap into this massive source of data throughout the Midwest?’”

Through their own research, Compeer learned that their appraisers knew the local market well. However, it wasn’t efficient to go very far outside of their area to gather data.  Furthermore, once they did get the data, it came from so many sources that it took a tremendous amount of time to standardize and analyze it all. At the end of the day, they needed a consistent, standardized data source that wasn’t specific to one auction. They needed a bigger picture – one that they didn’t need to develop themselves.

“We knew there was a lot of data out there. We just weren’t as comprehensive as we needed to be. [There are] several regional sources that are really good, but nobody was aggregating it.”

It was in this search for the solution that Mike’s deep industry knowledge was key. He understood that standardized data was the key to his team’s success, especially data that can be sorted by time and location.

“It was essential to have a single source that aggregated the data to use in our farm equipment evaluations. In the past, if someone went into a website on a Monday and got information for a specific tractor or combine, then someone went out a month later, that data might be completely different. Coming from a real estate background, my bias is toward having actual market data.”

The Search

Compeer put out a request to potential vendors asking them to aggregate all this massive amount of data, organize it, and bring it back in. It had to be robust, accurate, and transparent.

“Compeer didn’t really want a black box answer – i.e., push a button to get a value. We were already really good at [getting that value] ourselves. We needed a way to put the data in our own hands efficiently and then let our trained chattel appraisers make the determination of the final value using that data.”

Mike learned long ago that innovation is everywhere, not just in The Silicon Valley. To that end, he intentionally reaches out to progressive companies who push the boundaries of what is possible.

That’s where he met us.

“We met Mike through a mutual friend who was also in the Ag-Tech space who knew he was forward-thinking and always looking for better solutions to age-old problems,” stated Jeremy Hewitt VP of Sales at Tractor Zoom and Iron Comps.

Mike’s drive for innovation did not stop with finding a partner. He was very clear in his expectations of the scope of work. That set the bar not only for his internal team, but also for us, too. People who love their work will typically rise to meet a worthy challenge – and for us, this was definitely worthy.

“We really challenged the Iron Comp team to make enhancements along the way. Things that help us do our jobs better and to innovate in the future. Iron Comps has been very responsive to our requests. They work closely with our team to make changes and improvements. Some of them even happen in real time!”

The Results

Two of the biggest ongoing benefits of Mike’s approach are access to robust data and massive time-savings. “Our travel evaluators spent countless hours finding, analyzing, and putting data into spreadsheets to make it useful. I would say they probably spent as much as 40 or 50% of their time on that process! What Iron Comps has allowed us to do is push that process back to [Iron Comps]. Instead of following up on every individual auction, we can validate that data internally. We can confidently say, ‘Yes, the data you are getting matches what we see out in the country.’ Ultimately, Iron Comps has saved our team a ton of research time. Finally, my team can really focus on what they are very good at! Furthermore, they’ve got 40-50% more time to devote to it, too!”

“Iron Comps has also helped us standardize our data set compared to where we were before. An appraiser in Illinois might’ve used a different set of data than say someone in Minnesota or Wisconsin. Now they all have access to the same, larger set of data. It’s so much more robust and comprehensive compared to what we dealt with before.”

From where we’re sitting, an open mind to new partners, deep industry knowledge, and die-hard devotion to high standards made all the difference in the world to this project – both for us as well as the team at Compeer Financial. Furthermore, it allows them to focus on what they do best – continually doing better for their farmers! While this is reason enough to invest in Iron Comps and its capabilities, they’re just getting started. There’s lots more innovation on the horizon!

Is ’21 the year to offload that older baler in the barn?

Is '21 The Year To Offload That Older Baler In The Barn
Based on what we’re seeing in the auction market, 2021 is the year to clean up that old baler in the barn and sell it. They’re worth more now than ever before!

A year ago, we wrote about the seasonality of the baler market. The summer dip in values still exists, but that was a flat commodity market. The price of all machines since last harvest have been nuts! With commodity prices on this meteoric rise, does that make 2021 a unicorn year where you can turn a profit on older equipment?

Just last week we talked with a farmer who bought a farm down in Tennessee. With that farm came a relatively new Vermeer 504R round baler. The farm was needed. The extra baler…not so much. Iron Comps came in handy to show the farmer what he could expect from this yellow iron round roller if he sold it. That got us wondering, “Could farmers have invested in machines last year, and flip them now on the open market for a profit?” Land appreciates, but machine values almost always head downhill with time and usage.
The round baler market has responded to 2021 like all other machinery. The average price of all used balers was relatively flat from 2019 into 2020. The overall average price did increase 3%, but the 1st quarter average price dropped 12% (Q1 is typically the best time to score a deal on a baler). Either way you slice it though, 2021 has been making hay! Average round balers sold in the first quarter of 2021 are up 25% more than the same time in 2020! Even 10% higher than this time in 2019!
But our question needs to be based on more specifics than descriptive statistics can provide. With a few clicks in Iron Comps Insights, I pulled up dozens of sales of one of the most popular balers to ever roll off the Vermeer Mile in Pella; the 605 Super M. Two particular balers provided a great example of this contrast. The first sold at the beginning of this market rally in early September of 2020, and the second in the midst of this run in late January of 2021.
Although built 3 years apart, these 605 Super M’s both had the same high-end features and sold in the Midwest. The 2011 that sold in September went for $19,750 with 7,150 bales under its belt. The 2014 sold in January for $22,500 with slightly more than 11,800 bales counted. Despite the higher bale count, the more recent sale went for $2,750 more than the model sold last year! That is 14% more for a baler that has already produced 65% more bales.
As the market gets more “bull-y”, it’ll be more important than ever for farms to understand their collateral leverage. It’s not just your grain that’s worth more! If you are not yet using Iron Comps, you can head over there to find out how much more your machinery is now worth!

Browse hay & forage equipment at auction.

Does this tractor make my planter look big?

John Deere DB88
We like big planters and we cannot lie…

While checking fields with my dad last summer, he pointed out some low strips in our neighbor’s corn field. They were equally spaced about every 100 feet. Apparently the neighbor was pulling one of his big planters (a 48-row) with a pretty big 4WD, and the weight caused compaction in those rows. This led to an interesting argument discussion about what the “perfect” planter was. We never did agree on one, but it was an entertaining discussion while riding in the side by side.

There are consequences to every choice and farm equipment is no different. It’s a matter of knowing the pros and cons for your operation. Since I was riding shotgun, I pulled up Iron Comps Insights on my phone to understand the value of 48- and 36-row planters. Some farmers got some seriously good deals on planters at auction, especially given the price of a new one! Case in point: late last year, a nice 36-row Kinze 3700 sold in WI for $22K!
Kinze 36 Row Planter
Bargain Alert: This Kinze 3700 36-row planter sold at a WI retirement auction for $22K!
Price aside, though, another key factor with implements this large is how you’re going pull it. Most manufacturers recommend at least 350 horses to pull a 48-row planter. That probably won’t come as a shock to most of you, but if you were planning on using the trusty John Deere 8400 for a 36-row or bigger, you’ll be in for a pretty rude awakening.
Brice Volker 4640 Kinze 8 Row
Brice Volker’s 4640 is enough for the 8-row Kinze he drags with it, but not a lot more…
I was curious to know the difference in the horsepower of farmers’ tractors between those who own a large (36-rows+) planter compared to those with a more moderate 24-row, I dove into Iron Comps. Our Insights tool was essential for this because it lets me filter auctions by type. So, I set the filter to only include estate and retirement auctions narrows the results to individual farm fleets. Finally, I split those auctions in two groups. The first sold 24-row planters and the second sold 36-row planters (or more). Of those two, I looked at the data to see the percentage of tractors sold in different power ranges. You can see the results in the graphs below.
There is no doubt that big planters require a big tractor. What’s most surprising is that farms with a large planter had such a small number of sub-300 horse tractors.
A 24-row may only be half the width of a large planter, but it’s still a pretty big implement. For auctions that sold one, you find a lot more high-power tractors when compared with all tractors sold at retirement and estate sales.
As we approach planting season, know there are a good number of quality planters on the market. Just make sure your eyes aren’t bigger than what your operation can handle!

Shop planters at auction right now.

(Originally published in March 2021 on the Iron Comps blog.)

John Deere ProDrive: Worth it in used combines?

John Deere ProDrive S670 Combine
Does it make sense to look for a used John Deere ProDrive combine? Hit the photo to browse combines at auction!

The Backstory

Not too long ago, my buddy Dustin and I were working on his S670, getting it ready for harvest. He’s a farmer in northern Iowa, and his combine is getting up there in years. He was debating over whether to continue to repair it, trade up to a different used model, or buy a brand new one. Dustin knows his equipment better than just about anybody I know, but I could see that his head was spinning. With so many options on the market right now, I’m sure he’s not the only one!

The Problem

One of the unknowns he was wrestling with was about the transmission. Is a John Deere ProDrive (essentially an IVT system) the way to go, or is a conventional 3-speed the better idea? Try Googling that question sometime; you’ll find so many passionate opinions on the ag message boards that you’ll give yourself a monster of a headache! Eric in western New York says, “ProDrive is a must have!” Two lines later a guy in southern Illinois comments that he absolutely hated the one he’s got now and he can’t wait to get rid of it!
While the debate still goes on, the general consensus is that ProDrive transmissions make better use of torque from the motor. In turn, that makes it easier to maintain speed in the field (especially useful in hilly ground like Dustin’s). The trade-off for the increased efficiency is that the option itself is more money when they’re new, they’re slower on surface roads, and depending on who you listen to, they’re a lot bigger headache when they break.
So, to try and help Dustin, I told him I’d do some analysis on it using our Iron Comps data to see what effect ProDrive had on residual value. I couldn’t help him weigh all of his unique pros and cons. That said, I do have access to a huge database full of farm equipment auction results. I knew that I could help him with the numbers aspect.

The Math

I’ll admit, I was curious as to how it would shake out. I knew there would be a “ProDrive Premium”. But at some point, I figured there would be a point where that started tailing off. I also wondered if there was a point where the 3-speed became a better option.
I made a call to a local dealer and found that an S670 with ProDrive sold for about $428K in 2015 (ProDrive was a $7K option). So with that baseline number, I went into our Iron Comps database. It’s powered by Tractor Zoom’s auction data, and captures over 55% of the market, more than any other source. We’ve got close to 150 S670 sales just within the past two years in the database. It’s a numbers game and the bigger the data set, the more confident we can be in our results.

Graph showing separator hours vs. sale price.
Separator hours typically have a large effect on combine values. The graph below shows how the sale prices fall as the sep hours increase. 
The table below breaks down the values even more into three scenarios of combines with 600, 1200, and 1800 hours. The first row shows the expected average value for ProDrive S670s. The second row is the expected value of a S670 with a 3-speed. The bottom ‘ProDrive Premium’ percentage is the amount that could be attributed to the ProDrive for that age of combine.
The results for the newer combine affirm what ProDrive advocates have been preaching. A ProDrive in our dataset with 600 separator hours should sell for about $185K at auction. Its 3-speed counterpart, just $163K! A difference of $22K (13% premium) is a lot bigger number than the $7K option when it was new! This indicates that there’s definitely a demand for these combines – especially those without a ton of hours!
As the combine ages, so does excitement for the ProDrive. So much that it is essentially negligible at 1800 hours. A likely explanation is the cost to repair a ProDrive, which older machines are more likely to need. Typical repair bills for out-of-warranty transmissions are fairly steep. Based on what I’ve heard, you could be looking at $25-30K to replace a shelled transmission. Not a small number. I can definitely understand why the premium starts to fall.
As one final check on this pro-ProDrive conclusion, I like to filter down by auction type. Retirement auctions tend to bring higher premiums. Consignment sales tend to be lower and represent the market value floor. The unexpected challenge I discovered was that few S670 3-speed combines hit the retirement market. Conversely, we haven’t seen a lot of ProDrives selling at consignment sales. I’m still working on determining why this happens.
I showed these numbers to Dustin the other day over a beer, and it pretty well confirmed what I think he needed to hear. When I left the shop, he was on his tablet browsing combines at Tractor Zoom, and I’m sure he’ll find a nice ProDrive S670 at a retirement sale somewhere.

A modified version of this article originally appeared on the Iron Comps blog a few weeks ago.