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High farmland and equipment sales expected to stick around for a while

Farmland and used equipment are selling for record high prices at ag auctions and an ag economist says that trend will likely continue in 2022.  

Gary Schnitkey with the University of Illinois tells Brownfield he expects the rate of increases to slow soon, but not necessarily go down.

“We can’t maintain those high increases indefinitely, but there isn’t any sign that we are backing off prices. The rate of increases is slowing but we are still going to be looking at prices of both of those probably edging up over time.”

He says low interest rates for land as well as labor and supply shortages on the equipment side have contributed to the increases, but the biggest factor is higher farm income the last couple of years.

“One of the things many farmers do to shelter income is buy equipment and for the first 11 months of last year we saw very robust purchases of equipment, so we have had limited supply and high demand which led to higher new equipment prices and in turn used equipment went up as well.”

Schnitkey says farmers should know this isn’t just a trend in the US. Ritchie Bros. recently held and auction in Canada that included 9,600 acres of farmland and equipment with a sale total over $33 million Canadian dollars- their largest ag auction ever.  Equipment sale highlights included a 2018 Seedmaster air drill for over $347,000 US dollars and a 2016 John Deere 9260RX track tractor for over $335,000 US dollars.

He says it is also important to note the pandemic has increased the availability and popularity of online auctions, attracting more buyers from the comfort of their homes and in turn higher bids.

BigIron Auctions shared with Brownfield examples of record-breaking prices from their online auctions in December including a 2019 Case IH 7250 combine for over $320,000 and a 2004 Challenger MT865 track tractor with 6100 hours for over $167,000.

Interview with Gary Schnitkey

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