(Photo: Joclyn Bushman/Iowa Soybean Association)
Online sales have expanded opportunities for buyers and sellers
October 14, 2022 | Bethany Baratta
Supply chain disruptions have squeezed the availability and pricing of fertilizer and other inputs. These interruptions also impact the availability of new tractors, combines and other equipment farmers use on the farm.
Needing the iron to plant, harvest and go about their jobs, farmers are looking at used equipment to fill in the gaps.
“We’re in an interesting time in agriculture right now,” says Tim Meyer, an auctioneer for Steffes Group, Inc., a leader in marketing farm, construction, transportation equipment and land sales in the Midwest. “We have unprecedented markets right now based on supply and demand.”
Steffes Group sold 1,469 tractors, 365 combines and 24,678 acres of land at 697 auctions across 11 states in 2021.
Conversations with equipment dealers early in 2022 indicated they were at the auctions to fill their lots, and everything those dealers had coming in their lots for the 2022 season was already sold. The same dealers were still waiting on implements delivered later than anticipated due to supply chain snags amid COVID-19.
“We’re offering bidders and buyers something they can’t get anywhere else: the opportunity to physically take a piece of equipment home the same day,” Meyer says.
Akin to 2013, used equipment dealers have been among the largest group participating in live and online sales in 2022, Meyer says.
“The last time equipment dealers were buying equipment at auctions was in 2013. They are looking to fill their lots with something to sell, even if it is used,” he says.
Higher commodity prices and generally positive farmer sentiment give strength to demand as well as prices.
“Equipment across the board is 30% higher than it was 18 months ago,” Meyer says. “Even with the threat of rising interest rates, equipment demand is still strong.”
He notes tax consequences especially heading toward the end of the year, create an urge to spend money on necessary farm equipment.
High in demand are pre-DEF tractors, grain trailers with hopper bottoms and livestock trailers. However, the highest demand is for late model low-hour equipment due to the complications of buying new.
Steffes Group sold more than 24,000 acres across the Midwest in 2021. More than 80% of Iowa farmland is unencumbered, without loans and liens. Iowa farmland sales reject typical supply and demand economics; when Iowa farmland prices rise, lands available for sale typically follow upward.
“We’re selling three times the amount of real estate in Iowa as we were a year or two ago,” Meyer says. “Land is at an all-time high, so it seems like there is more interest in selling it today. We will see less land for sale as the price goes down.”
Iowans are purchasing the majority of Iowa farmland, namely, existing neighbors to the farmland, who benefit logistically by having land in proximity to the other fields they already own.
Trucks and construction equipment
In addition to land and other common farm equipment, Steffes sells trucks, semis and construction vehicles. Meyer says the truck market has softened a bit over the past quarter.
“The goods are getting moved, the contracts are more competitive and the over-the-road job market is not as lucrative as it was a year ago,” he says.
Construction iron, on the other hand, is following the same upward trajectory as the ag market.
“There’s a huge demand for construction equipment right now due to announced and expected infrastructure projects,” Meyer says.
Meyer says that the demographics of Steffes’ sales have shifted in recent years.
Internet sales have transformed the business, he says. A live sale also has an option to include online bidding, opening up the same to a world of buyers.
While most land buyers are present physically at the sale, more than half of the equipment purchased on a live sale is bought online.
“Some come to sales for the atmosphere, but people like the convenience of buying online,” Meyer says.
What was once an in-person event, allowing farmers to kick the tires and look under the hoods of equipment up for bids, the pandemic accelerated the comfortability of online buying.
Buyers ages 60 and older make up the largest demographic of those bidding online.
Before COVID-19, about 15% to 20% were decidedly in-person buyers, unwilling to buy online.
“Those people found nephews, wives, an equipment dealer or a banker to help them get registered to bid and buy,” Meyer says.
Today, he estimates that fewer than 10% of their customers are not willing to buy online.
Steffes has expanded sales opportunities for buyers and sellers to host a live sale with online bidding.
“We’re moving equipment all over the world with our online platform,” he says.
With more than 130,000 registered bidders online, Steffes sold to buyers in nine countries and nearly every state in 2021.
Meyer Provides These Tips:
- Do your due diligence: Call the seller or auctioneer before the sale to learn more about the equipment up for bid. Or hire a mechanic close to the auction to check the equipment for you.
- Make sure you’re comfortable with the description and pictures you find online. It truly is an easy process.
- The highest number of farm ground sales is in November, more so than any other month of the year.
- Farm equipment sales are hottest in December when farmers can defer or spend money at the end of the year.