Game theory, online auctions, and the hot used machinery market — a LIVE! Q&A with Greg "Machinery Pete" Peterson

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In this episode of RealAg LIVE!, Greg “Machinery Pete” Peterson gives us the scoop on the used machinery markets in both Canada and the U.S., as well as pricing trends, and even gets in to the more psychological side of online auction sales.

Tune in weekdays at 1 pm M/3 pm E on your favourite social media channel for a new RealAg LIVE! guest

SUMMARY

  • The used market right now? November was unbelievable!
  • If item was in good condition, particularly for the used tractor market, it sold well
  • “Nosebleed country” for the cost of a tractor or combine
  • Push to online auctions has pushed the market a lot
  • 11 year old AGCO, sold day after Thanksgiving in Ohio, $24,000 over the highest price Greg’s ever seen
  • Factors: DEF, how easy is the tractor to “wrench on”? Used inventory system is tighter, too
  • Online sales, can a person purchase in one area of the country, and sell for more in another area?
  • If everybody locally loves “Shaun’s Auction dot com” there’d be tons of eyeballs, clicking the button
  • Greg gets into some psychological truths about online equipment auctions, game theory?
  • “There aren’t many auction steals with online bidding”
  • Greg’s fascinated with the adoption of online auctions across the industry, huge upsides
  • Whether you’re in Canada or Kentucky, Greg’s noticed that as farming has become more specialized, operators knew exactly what they wanted
  • Any equipment that isn’t seeing that price spike? Generally, it’s been a lift to all sectors. Used combines could use a little more “looseness”
  • Negative interest rate?! Purchase premium to straight cash, and where do the trades go from those units?
  • Greg wants to interview farmers that were in it back in the early 80s. The young’uns wouldn’t be able to get their heads around a 19 per cent interest rate.
  • One- to three-year old stuff has strengthened, if there is remaining warranty. Put the remaining warranty at the top of the ad
  • $400,000 for a two-year old combine? The new one costs quite a bit more. There was a soft spot for 8-year old models, but not anymore
  • Collectors vs users. The magic 12 year old rule. Whatever tractor was your favourite/on the farm when you were 12, that’s going to be your forever collector item.
  • What are people doing with those “collectables”? Half the time, people want to put them in the field, which seems kind of mad to some people.
  • Six states or provinces away, you don’t know how that used tractor was used
  • If the yard looks great, everything sells high. You can’t tell how the equipment was kept, if it’s an online auction. Greg advises using video to flesh that out and use it for people to make a judgement.
  • How have Greg’s data points changed over the years? When he started there was a lot of ink and Greg’s ears ached. The data is out there more, there’s more specifications. The speed of things has changed.
  • Machinery Pete is a busy guy: filming online auctions, social media, website upgrades

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