Machinery Pete: Average Doesn’t Cut It

Auction Prices on Case IH Magnum 290 ( )

Do you want to get a handle on what’s happening with used farm equipment values in 2019? That’s easy—just study auction prices on Case IH Magnum 290 tractors.

It’s all about condition—more so than I’ve ever seen in my 30 years tracking sale price data. Good condition equals solid to strong buyer demand, even in these extended tough times we’re wading through in the ag economy. Used values are sliding noticeably lower for equipment in average to below-average condition.

Check out the accompanying table of 2019 auction prices on Case IH Magnum 290 tractors through the third week of May. Note all areas of the country are represented as well as all types of auctions.

No matter what type of auction or the location, the same rule applies. Good condition brings good money, while prices for not-so-good-condition equipment are weakening.

Take for example the two Magnum 290s highlighted in our data table. The 2012 model with 3,899 hours that sold for $54,000 at the May 16 farm auction in northeast Arkansas is the lowest auction price I’ve ever seen on a Magnum 290. And not just by a little bit. The prior low was $70,100 for a 2014 model with 3,008 hours on an online auction May 9, 2018 in west-central Kansas.

The other tractor, the 2014 model Magnum 290 listed with only 560 hours that sold for $151,000 at the Jan. 30 farm auction in west-central Iowa, was the highest auction price in exactly four years. The key factor in this strong price, besides excellent condition and low hours, that drove bidding was a Cenex 10-year/10,000-hour extended warranty.

Overall the average auction price on Case IH Magnum 290s so far in 2019 is $94,271. The average auction price two years ago (2017) is almost identical at $94,409. Yes, the model is holding value very well, but this reality is driven by the increasingly strong buyer demand for the nicest units, while demand and prices soften for tractors on the other end of the condition spectrum.

I’m seeing and hearing the same trend with farmland values: good ground brings hot bidding. Average ground, meh.