DTN/Progressive Farmer was knocking around the roads and ways of the Farm Progress Show recently on a sunny and surprisingly, coolish day and came upon an exhibit full of yellow-shirted reps handing out yellow, five-gallon buckets -- five-gallon buckets of every stripe were highly desirable show swag this year.
We veered inside and found Mark Stock, co-owner, co-founder of BigIron Auction. He and his brother, Ron, co-founded an auction business in 1984 that over the years morphed into BigIron. They grew up in a large farming family, with operations two hours west of Omaha. Mark gave us a few minutes to talk about the (hot) used equipment market.
DTNPF: Thanks for having us in, Mark. Busy day out there for your yellow buckets. Tell us about BigIron.
STOCK: We sell farm machinery, primarily that's 75% of our business. We sell trucks and trailers and some construction related items, mostly catering to the ag sector, sold as an unreserved auction on our bigiron.com website. There'll be anywhere from 1,000 to 4,000 items on sale every Wednesday.
DTNPF: How's business?
STOCK: People are getting comfortable with an online platform. We'll have 40,000 people, 40,000 different IP addresses, watching on our sales days in the summer. That will climb up to 80,000 in the winter months.
DTNPF: How has COVID-19 affected the market for farm machinery sold by auction?
STOCK: Our machine sales numbers are up 29% year-over-year. There's just no supply out there from (original equipment manufacturers). I just walked across from here to the Goodyear Tire guys, asked how long it would take to get these tires. They said probably not until March or April of next year if you order them today. That's no different than any of the machines out here.
DTNPF: Why tires?
STOCK: It's the resin. Everyone is short of resin. I mean, we ordered a whole bunch of buckets to give away and they sent us less than a fourth of what we ordered because they don't have enough resin to make the plastic; the same resin that is in tires. So far, no pushing or biting to get our buckets but it's been doggone close. Buckets are hot. Everybody wants a bucket. But the commodity to make them is hard to find.
DTNPF: Buckets are hot, what about machinery?
STOCK: Anything that's well-cared-for is selling for a premium. We sold a 2012 Timpte grain trailer last week. It brought $38,000. The guy bought it new for $34,000. Now, it was meticulously clean. It looked like a brand-new trailer. But still, get $38,000 out of a nine-year-old grain trailer? You call any one of these trailer manufacturers and you want a new one, you're not getting it for harvest. In fact, you're not going to get it until February or March of next year if you're lucky. Guys will travel to get this stuff, too. The average distance of an item being freighted right now is a little over 300 miles.
DTNPF: What's the value differentiation between new and used?
STOCK: The differentiation always flirted around 20 to 25%, used prices under new. This year, it is a lot narrower in some cases, it's 95 to 105% of new compared to buying something a little older.
DTNPF: What are the top sellers right now?
STOCK: Grain trailers are hot. Low-hour combines are super-hot. We just sold an 800-hour (on the separator), 2016 John Deere. It brought $197,000 ... super, super hot. You can find a good bargain on a higher hour combine, but you're gonna have to fix it. So, if you'd like a winter project, and you can roll it into the shed and fix it, buy a higher-hour machine. Low-hour tractors also top the market.
DTNPF: Give me your look into the future. What do you see?
STOCK: Your typical farmer is buying or selling at least three to four items every year. One year it's the combine, next year they upgrade their auger, the year after that they upgrade the field cultivator. They're always upgrading. It's just the nature of the business. And then, its true a large percentage of farmers are going to retire in the next 10 years. There's going to bring more and more retirement sales.
DTNPF: What about used technology, the technology attached to combines and tractors?
STOCK: It's not always about technology. There are always buyers who don't want that because they want to be able to fix it themselves. They don't want to use a computer to fix it.
For video features on BigIron Auction and other new products from the Farm Progress Show go to Twitter: @DMillerPF
Dan Miller can be reached at email@example.com
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