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!

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.

World Famous Bi-Rotor Combine Goes to Auction

Bi Rotor Combine

Auctions can be a great avenue to acquire one of a kind items, from collectibles to machinery. This time, it’s a machine that changed the course of the modern farming landscape!

The original Bi-Rotor Combine (XBR2) will sell in Burr Oak, Kansas at an auction hosted by Wolters Auction & Realty on October 29, 2018. The world lost one of its finest inventors, Mark Underwood, last summer. The auction will also include other machinery that he had on the farm, as well as the farmland itself.

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