When is the best time of year to sell my farm equipment at auction?

“When is the best time of year to sell farm equipment at auction?”

This is a question we get all the time (as well as live vs. online farm equipment auctions). Whether you’re selling in order to upgrade, downsizing, or just offloading old stuff, it’s a big decision. Furthermore, timing is everything, and it can make a huge difference in a final hammer price. But when is the best time to sell?

Let’s break it down.

The Short Answer: End-of-year auctions

The short answer is that you’ll usually get more money for farm equipment at auction if you sell it at the end of the year. Generally speaking, auctions that happen during the last six weeks of the year will bring higher prices all the way around. There are a few factors that play into this, but that’s the rule of thumb.

Why is that the case? Well, it’s mainly a tax thing.

Tax Benefits and Section 179

Section 179 of the IRS tax code allows farmers to deduct the full purchase price of farm equipment. This is a pretty powerful motivator. By the first or second week of November, most farmers have wrapped up with harvest, and know about how much they can/need to spend on equipment for the deduction. They’ve also got a pretty good idea of what they want (or need) to upgrade for next year.

Those two factors turn into a pretty powerful motivator, and it leads to a higher volume of auctions and prices. Tax-deductible purchases have to be made by December 31st, and that drives heavier buying activity.

There are a couple other things that figure into this, though.

Commodity Markets & Yields

When prices are high and/or when the yields are good, farmers make more money. When the commodities are high, farmers upgrade and replace more equipment. Most of the time, tractors, combines, and planters are the machines that rank highest on the list. However, it’s not uncommon to see a jump in grain carts, semis, and hopper bottoms and all manner of other stuff, too!

On the other hand, in a down year or when it’s been a rough harvest, you’ll see farmers being more frugal. It’s the nature of the beast. You can’t spend money that you don’t have, y’know?

What this means for you, if you’re a seller, is that it’s a year by year thing. If you’re thinking that it’s time to move some equipment, keep an eye on the markets and pay attention to what farmers are saying about how the harvest is going. When it’s generally good news, it’s probably time to get the equipment cleaned up. If not, maybe consider waiting on making that phone call to the auctioneer – especially if it’s just extra equipment that doesn’t need to be replaced.

Regardless of when you decide to sell your farm equipment, there are a few things you’ll want to pay attention to.

Equipment Condition

If the equipment is in good shape and runs well (or it’s late-model), it’ll probably bring the most money at the end of the year. On the other hand, if it’s seen better days (be honest with yourself here), it may do better on a non-peak time when the bargain-hunter types could get into a bidding war over it. Peak auction season tends to favor nice, well-maintained equipment over projects.

The Auction Calendar

An auctioneer’s calendar can (and will) fill up quickly, as will their auction yards. If you’ve made the decision to sell, get the details worked out with the auctioneer and if necessary, get the equipment in their hands. Remember, the sooner you get that stuff squared away, the more time the auctioneer has to advertise it. There’ll likely be some overlap amongst end of the year auctions, and it’s probably unavoidable. Allowing enough time for an auctioneer to get the word out in their various forms of marketing is crucial!

*Also, shameless plug. If you’re working with an auctioneer, make sure they’re partnered with Tractor Zoom for added reach and advertising!

What if I can’t sell in November & December?

It happens. It’s not the end of the world.

If you can’t move it in November or December, you’ll definitely want to align your timeline with when the equipment will actually be needed…minus 3-4 months. For instance, if you’re selling a planter, the absolute worst time you could possibly sell it would be in the middle of May. Everybody’s already in the field at that point, and most farmers aren’t looking for a planter at that point.

If we’re talking general rules of thumb as far as seasonality goes, we would suggest being 2-3 months ahead of when farmers will need the equipment. In the case of a planter, allowing enough time for the new owner to go through and set it up to fit their application is important – and that all takes time, y’know? We’d also recommend the same general lead time with specialty crop equipment.

The collector tractor market exception…

The one exception to all of this is the collector tractor market. Generally speaking, prices on collector tractors aren’t typically as subject to outside factors as everyday working equipment. For the rare/low-houred/barn-find originals, the buyers aren’t always actively farming. Oftentimes you’ll find that they’re retired or well-off. They don’t depend on a good year, because this is something of a hobby for them.

As such, the prices don’t fluctuate with the markets nearly as much as with other types of equipment.

For tractors that fit in this category, it’s not about whether or not corn is at $3.75 or $6.50. The keys to success here are great presentation, marketing in the right places, and an auctioneer who’s well-versed in the collector market.

Wrapping it all up…

At the end of the day, there are a lot of variables that go into figuring out the best time of year to sell your equipment. We’ve explained a few rules of thumb and some general factors that play into it, but it’s definitely not one size fits all advice. Every situation is different, and auctioneers are definitely the professionals who are best-equipped to help you make the right call for your situation.