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!

The Farmall 560: Bad News Travels Fast…

Farmall 560
This one-owner Farmall 560 lives on a Wyoming hay farm until November 10, 2020…maybe it needs to come live at YOUR place? Our friends at Musser Bros. Auction & Real Estate are handling this auction. They sure know how to take great pictures, don’t they? Click here to get the auction details and see a bunch more photos!

They say that bad news travels at the speed of light, and in 1959, International Harvester found that out the hard way with the Farmall 560. It resulted in one of the first “major” tractor recalls in history!

Now…that said, this particular tractor doesn’t have anything wrong with it. I literally just hung up the phone with the seller out in Wyoming. It’s a one-owner tractor that’s never had any major issues. Obviously it’s slept outside a few nights, but mechanically it’s pretty sound. The hour meter was replaced a couple of times, so the hours aren’t accurate, but it starts right up and drives just fine!

Sadly, that wasn’t the way it worked out for some of these tractors, though. If you ask an older farmer about the Farmall 560, some of ’em will tell you that they were the worst thing that Harvester ever built (even if they never owned one). Retired dealers might say the same thing, depending on who you ask (skip to about 12:30 to hear Paul Wallem’s take on the 560 and why it failed)!

For a few years during the late forties and early fifties, Harvester was broadening its horizons. Management felt like the ag equipment market was hitting a saturation point, so they set their sights on other markets. Development dollars went towards residential products like fridges and freezers, trucks, and lots of other things. The tractor division of IH wasn’t making great strides in development, they were sort of set on cruise control. They made some incremental improvements here and there, but other than that and some minor cosmetic refreshes, the tractors remained essentially unchanged from the stuff from the late 40s.

In the mid-50s, though, they got back on track as farmers began expanding their operations and asking for more capability. The 60-series was a new, modern looking machine with six-cylinder power. They were cutting-edge tractors poised to take the market by storm.

Except for one thing.

They broke a cardinal rule of product development.

Never release a product until you’ve beaten it to death…twice.

Harvester made a late-stage decision to put a bigger motor in the Farmall 560 so it could compete with the Deere’s 730, and they didn’t test the drivetrain hard enough. The rear end was a legacy piece from the 400/450, and the extra power from the new motor accelerated bearing wear in the bull gear assembly. Basically the ball bearings deteriorated enough that they fell out of the cage anda jammed in between the bull gear and the cast rear end housing. At that point, the housing would go kablooey!

Bearing Failure
Here’s what that bearing failure looks like.

At the end of the day, though, I want to be clear. The failure was NOT a widespread thing. In all actuality, the failures were pretty regional; they usually happened in areas where farmers were pulling 5-bottom plows in sticky, gumbo-y soil. BUT…the failures were catastrophic, and 2/3 of American households had telephones at this point.

Like I said…bad news travels fast. Word traveled from the field to the feed store, and then to the phone. It didn’t take long before it became pretty highly publicized and Harvester had to do something about it. In mid-1959, they issued a full recall of all 460s, 560s, and 660s whether they’d blown out the rear end or not. Dealerships would then replace the rear end parts, and IHC would eat the bill for it all.

It was a costly lesson for Harvester, too. It’s rumored that they spent $19 million bucks to fix those tractors, which was an enormous amount of money at the time (in 2020 dollars, that’s over $167 million). In a tremendous stroke of luck, though, IH had their best sales year ever in 1959!

At the end of the day, the Farmall 560 was – and still is – a great tractor. Dealerships fixed the tractors with issues, and Harvester implemented those fixes on the assembly line as well. If you’ve got a 560 today and it runs and drives, you’ve got nothing to worry about. I doubt there’s more than a hundred tractors out there that haven’t had the fix already applied!

Fun fact: Want to know how to spot a tractor that was part of the recall and fixed at the dealership? Look at the serial number. There’s a triangle after the serial number that the dealership added to each one that they fixed.

Farmall 560 serial tag
Here’s a Farmall 560 serial tag. That triangle signifies that a dealership replaced the rear end under the recall.

One more thing; if you need a gift idea for the IH fans in your life, I’ll bet they don’t have Paul Wallem’s book! Paul was an IHC executive in the fifties and then owned several successful Illinois IH dealerships into the late 80s. He recently published The Breakup: What Really Happened. It’s a terrific insider’s look at the multiple problems that came together at the wrong time to take down a farm equipment giant. It’s a great read!

The Breakup: What Really Happened
Click the photo to pick up a copy of the book for yourself or another IH fan in your life. You’ll be glad you did! (This is my copy. You can’t have it.? )

Looking for a 560 at auction? Start here.

Farmall Land: Where tractors, history, and passion collide.

Cutting to the chase…

First, let’s cut to the chase before we get into some of the stories. As of the time I publish this post, you’ll have about 10 days to get to Avoca to see Farmall Land. After 5PM on Sunday, September 27, Jerry & Joyce Mez are retiring, off to travel the world and spoil their grandkids! Subsequently, our friends at Girard Auctions will be sending everything off to new owners. Everything will be sold through a series of online auctions (the land and the buildings too) beginning later this fall. You’ll be able to find all of the details for the tractors and equipment on Tractor Zoom, so keep an eye on the site!

Farmall Land USA
Is this Heaven? Nope…it’s Farmall Land.

Now…on to the stories.

In the event you’re a red fan, the long lines of flourescent lights probably give it away. Today, we’re celebrating one of the coolest collections of interesting red iron on the planet. Welcome to Farmall Land USA. 

If you’ve ever wondered what true passion looks like, Farmall Land USA is where you’ll find the answer. From the moment you walk in the doors and sign the 3-ring binder guest book on the table, you’ll not only see the passion – you’ll feel it. Over the past 50 or so years, Jerry & Joyce Mez have built an utterly amazing collection of the red machinery that built this country. They genuinely appreciate the opportunity to show it to anybody who walks through their doors, too.

The Dealership Days

Jerry’s grown up around red tractors almost all of his life. The Mez family moved to Avoca, IA from Falls City, NE and Max (Jerry’s father) opened Avoca Implement in 1943 when Jerry was just a toddler. The dealership was quite successful, and eventually expanded to locations in Greenfield, IA and (for a short time) Atlantic, IA. Jerry & Joyce sold both dealerships to Titan Machinery in 2008. The museum has been their full-time focus since then.

“Since I was 3 years old, everything I have is attributable to farm equipment,” Jerry said in a 2010 INTERVIEW.

 

Jerry began collecting red tractors in the mid-70s when he got out of the Army. The first one in the collection? One of the first tractors his Dad ever sold, a Farmall F-20. It was all downhill from there! Jerry & Joyce have close to 220 tractors in the collection now (nearly all of them pre-merger tractors), give or take a few. You’ll usually find about 150 on display at any given time.

Favorite Tractors

The Farmall 1206

So what’s his favorite? A Farmall 1206 narrow-front that his father sold new out of the Avoca dealership to a local farmer in 1966. Jerry bought it back from the original owner in 1988. When I last talked with Jerry in late June, this 1206 was one of the few that he was planning on keeping after retiring from the museum.

Jerry’s favorite 1206. Photo provided courtesy of Octane Press – authors of the Red Tractors series of books. Click the photo to learn more about the series!
The ih 4300

In addition to his 1206, another favorite that Jerry really enjoys showing off is a 1962 IH 4300 – one of the rarest production tractors IH ever built! IH didn’t build many to start with (I think the number was in the low-mid 40s; they were essentially built-to-order by Hough). Many were used pretty hard by construction companies, and Jerry believes there are only about six of them known to still exist. Weighing in at 30,000 pounds and sporting an 817-cube turbocharged inline six mated to an Allison automatic transmission, this one is definitely a crowd favorite. He looked for it for about 15 years, too, and the restoration process was extensive (it was a basketcase when he got it). All in all, it took two full nights to clean it up enough to see what they were working with for the restoration!

IH 4300
Here’s the 4300 after Jerry’s restoration – and one of my favorite details on it.
Picture courtesy of Girard Auctions. Click this photo to see more photos and information about how they’ll be handling Jerry’s auctions beginning later this fall!
IMG 3176
Here’s the punch line on the other fender. Kids, always eat your Wheaties, so you can grow from Cub Cadet-sized to big powerful yellow tractor-sized!

Worldwide Destination

The museum typically sees well over 5000 visitors per year, and Jerry figures that he’s had conversations with guests from every continent and every state in the union as well! One of the last times I visited, I actually had an international (no pun intended) encounter while drooling over a wide-fendered Wheatland 1256! I met a man who was here in the states from Australia. He really wasn’t involved with agriculture in his day job back home, but he’d heard about Farmall Land and wanted to stop. “Stuff like this, and the people who run this museum is what makes America so great!” he said. Indeed it does, my friend.

farmall land usa
A pair of 68-series Binders. Note the M&W twin turbo kit on the 1568. Those kits alone can fetch $5K+ if they’re in good shape!

The farm and garden tractors themselves are one thing, but that’s not all that makes up this amazing exhibit. Additionally, the memorabilia and examples of other products that International Harvester (fridges, freezers, etc.) built is mind-blowing! Altogether, I’m sure there are well over a thousand die-cast toys ranging from 1/64th up to 1/8th scale, plus a load of nice pedal tractors too! Basically, according to Jerry, “If it’s red, we’ve probably got it.”

So, like I’d mentioned earlier…if you want to see this collection in all of its glory, you need to make some plans within the next week or so. After September 27, the doors will close permanently.

Additionally, here are some details if you decide to make the trip!

Address: 2101 N. Lavista Heights Rd., Avoca, IA 51521

(Basically, it’s at the intersection of I-80 and Iowa 59 off of exit 40; an hour or so west of Des Moines, or about 45 minutes east of Omaha.)

Phone: 712.307.6806

Web: http://www.farmall-land-usa.com/

Hours: Closed on Monday, Tuesday – Saturday 10AM-5PM, Sunday 12PM-5PM.

Admission: $10 for adults, $5 for 13-18, $3 for 5-12, and free under 5!

COVID-19 rules do apply as well, folks, so out of respect for Jerry & Joyce’s wishes you’ll want to have a mask with you, and wear it while in the museum.

All in all, there’s no community of people nicer than tractor people, and honestly, folks like Jerry & Joyce Mez and their small staff are the reason why. They absolutely love what they do, and love to share their passion for tractors with anybody who stops in to say hello. They’ve given very selflessly to the industry, farmers, and tractor collectors. In fact, I think I’m going to sneak away on Saturday the 26th and stop in one more time to say thank you. I hope I’ll see you there, too.

The Gallery!

Finally, here’s a gallery of photos from several of my visits, as well as a few shots from Girard Auctions! At the end of the day, though, neither my photos nor anybody else’s do Farmall Land proper justice. You really need to take it in for yourself.

Again, special thanks to my friend Lee Klancher and the team over at Octane Press for lending me the photo of that Jerry’s beautiful 1206. Lee wrote a great piece about one of his visits to Farmall Land. He’s got lots of photos that I didn’t get during my visits, too! Read that here.

Also, many thanks to my friend Ken Girard at Girard Auctions for lending me a few photos of tractors that I didn’t get in my visits! Click here to learn more about how Ken is planning to run the Farmall Land USA auctions!

Lastly, if you’re looking for red iron of your own…you should be looking here!