A version of this article was originally published in the June 2020 issue of Successful Farming
With the first cut of the 2020 season approaching most of the country, you likely already have your large round baler ready for the field. If not, you may be in luck. We sifted through over a thousand large round baler sales from the past three years to discover if there is an optimal time of year to hit up the auctions looking for that new baler. Well, there is certainly a better time to buy, and a time to avoid. Or, conversely, if you are looking to sell, there is one month in particular that you should be targeting. By our analysis, many of you already are.
In our analysis we only looked at the six most common large baler brands on the resale market (John Deere, New Holland, Vermeer, Case IH, Hesston, and Gehl) to help control for variability. These six brands consist of roughly 90% of the large round baler resale market, so the sample certainly covers the average over the past three years. The flip side of that coin though is that there are the variations within this data. Age, and # of bales the baler has produced, 4 ft vs. 5 ft widths, and inclusion of a cornstalk special to name a few. Keep in mind when you are looking at a specific type of machine, it always helps to drill down to specific comparables in order to make the best decision.
As I mentioned at the onset, you likely are already set with your baler for the year. Perhaps that is why this time of year, June and July, offer some of the best deals for used balers. Our analysis shows a significant discount off the average annual price when a baler is purchased in these two summer months. These deals may be difficult to find though, at least in July. This mid-summer month sees the second lowest month of volume of balers sold at auction. More than likely this is a result of fewer farmers wanting to offload their balers in the midst of the season. We dove a little deeper into this seasonality trend by removing those balers that sold for less than $3,000. The same seasonal trend held, with obviously less variation.
One additional factor that may encourage you to browse the market this summer is the challenging cattle market we’ve been facing. Tracking the relationship between forage and fat cattle prices, 75% of the time, the average month to month baler price changed in coordination with the change in the cattle market. So when the cattle market drops from one month to the next, the average price of balers also drops in the next month three out of four times.
If you are on the other end of the auctioneer’s gavel, you can hold on to that piece of equipment until the weather chills for a hotter deal. Many farmers are pursuing late-year tax write-offs or simply waiting until the crops are in before making that purchase. December not only holds the top spot for a price premium, but also wins the award for highest volume moved at auction. So much for the supply and demand curves!
