New or used, small or large, red or green or blue or purple, machinery supplies are tighter than a drum right now. But if you spend some time on the internet searching equipment websites, you can find exceptions.
Model year 2019 and 2020 round balers are one of those exceptions.
Roughly between 2017 and 2020, cattle prices were stable. Corn, on the other hand, was cheap before a rocket ride late in 2020. That gave feeders nice profits, which buoyed the value of feeder calves and sent cattle producers to dealers’ lots to upgrade their hay equipment. Today, the balers purchased then are coming into dealers’ lot on trade and providing an opportunity to find decent prices on late-model round balers.
I couch the term decent. Any and all late-model used equipment is bringing exceptionally strong (if not historically high) prices these days. Well-equipped round balers are certainly enjoying steady values, but not outlandish prices such as we are seeing for tractors combines and tillage equipment, for example.
What to Look for in Baler Bargains
Seasonality will certainly impact the price you’ll have to pay for any baler, whether of a small square or large round configuration, says Scott Cook of Cook Auction (cookauctionco.com). “Certainly, it’s one of those pieces of used equipment that producers wait until just before hay season to buy, and that will drive up their price at auction,” Cook explains. “Large square balers, primarily used by commercial hay producers, are different in that regard, because they are often bought or sold at the end of the hay season.”
Cook’s comments refer to auction sales, but the same timing applies to dealer purchases. “Particularly when it comes to round balers, we see a lot of sales in the late spring,” says Jeremy Knuth of Heritage Tractor, a Deere dealership network located in Kansas and Missouri.
How It’s Equipped Sets Bottom Line
The values listed in the Pocket Guide (on the opposite page) reflect dealer asking prices only on 2020 round balers that produce 5-foot-wide bales. This size baler is the most popular harvester on the market for livestock producers. Professional hay makers prefer 4-foot-wide bales.
These values reflect differences in how well equipped a baler is. For example, specialty crop or silage special machines sell for 15% to 30% more. Other features — such as a hydraulic header pickup lift, bale push bar, high-flotation tires, monitor (particular if equipped with moisture monitoring), and ability to vary belt pressure to adjust bale cores — add to the price of a machine.
With the possible exception of 1- to 2-year-old balers, you should inspect a machine you’re interested in. Look at the bale counter; it offers “as good a guide to determining how much life is left in the belts, key bearings, and other wear components as anything I can think of,” Cook says. “Certainly, overall appearance will give you an idea of how well it was taken care of, but bale counts reveal how much internal wear you are buying.”
Key components to inspect include the pickup head, tires, knotter, and drive chains. Cook peeks behind belts to look at carriage bolts as a good guide to wear. “If they are worn down, then the machine has dropped a lot of bales,” he says.
Different Approaches To Predicting Prices
By Andy Campbell, TractorZoom.com
Looking to upgrade equipment? We all know getting something off the manufacturer’s line is not happening unless you ordered eons ago. Used quality pieces are out there. Yet, with all that is happening in the ag industry, how much should you expect to pay now?
Estimating sale price has always been difficult. Thanks to COVID and the supply chain buckling, valuing equipment is harder than ever! A few methods for price estimation can help: Each has its own merits and limitations.
Comparable sales
Using similar past sale values is by far the most popular method. In fact, the three methods I mention below all rely somewhat on using comparables. This method works even better if you have a lot of data to help balance variations. At Tractor Zoom, we have more than $3 billion in equipment sales data (and it’s growing fast!), which helps deliver reliable information for these types of equipment decisions.
However, there are limitations to just using comparable sales. Namely, finding them. I don’t know many people who are passionate about scrolling and searching online. Plus, in a dynamic market like we are experiencing, you need the most recent data to be relevant. We have already seen some tractor and combine values jump 30% over last year. When you do find sales, being able to easily filter and process the information is key.
Calculation
Speaking of processing information, when you have enough of it, you can analyze how much each feature contributes to the overall price. The process of building a model that predicts the price is too long to explain in this article, but it requires a great deal of quality data. Even if you do have that — and we do — there is always some error. Sole use of this method has a big limitation: All sales data is historical. Any model built from it can do a good job of describing past sales but doesn’t account for the future outlook.
Gut feel
The bidding starts. Your heart races and rational decision-making can get thrown out the cab. While these valuations are more emotional, don’t disregard them.
Most of our decisions are driven by emotion. They can be based on past experiences and unique personal insight that a computer cannot fully capture. Farmers’ outlook allows them to adjust their target price. This is why used equipment prices are somewhat correlated with swings in the commodity markets.
Crowdsourcing
If two heads are better than one, how much better are two dozen? Unbiased feedback from many people familiar with the subject can help refine an answer that is already within the ballpark. Although, if the starting point isn’t defined, this method can produce large variances in the answers provided.
Tractor Zoom has just unveiled its Price Prediction feature that utilizes all the above aspects of price prediction. For example, you can go to tractorzoom.com to vote on whether a 2017 John Deere S660 with 619 separator hours will actually sell for the predicted $193,000 price.
This predicted combine price is generated by using past comparable sales in a calculation. Then your gut feel takes over by voting if the bid will be higher or lower. After voting, you can see crowdsourcing at work by comparing your vote against that of other farmers participating on the Tractor Zoom website. Want to see if your vote was correct? The final sale price is emailed so you can fine-tune your appraisal skills.
