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He’s been on the machinery trail for 30+ years, and founder of Machinery Pete, Greg Peterson, has nine lessons he’d like to share with farmers. 

1.    The 10+ year old magic line 

Peterson says there’s something about once a piece of equipment reaches 10 years old and is in good condition, it’s what everyone wants. He notes this trend is colorblind, and it’s something he’s been watching for more than 30 years. 

“There’s an assumption that this trend may be momentary because right now those 10-year old tractors and combines are also pre-DEF and pre-Tier 4. But I believe this rule will continue to hold true,” Peterson says. 

2.    The rising price of new pulls up used 

This trend goes hand in hand with the first, Peterson notes as he says he often hears at an auction the retort of “what’s a new one cost.”

“The ever-rising price of new equipment continues to pull up on good condition used equipment values,” Peterson says.

He gives this example, which is the highest price he’s ever seen on a modern tractor–a 2018 John Deere 9620RX with 623 hours (Limited powertrain warranty to June 2021 or 3,000 Hours) sold for $407,000 on June 19, 2020, during an online auction, which was located in northwest Illinois. 

3.    30 years old does not mean antique anymore

“When I started 30 years ago, 30 year old tractors were from the late 1950s, and we called them antiques,” he says and reports at the time, the highest auction price for a 30 year old tractor was $3,600 for a John Deere 630 that sold in September 1989. 

However, today, 30 year old tractors are working assets, the cost has gone up. 

Last year, a 1989 John Deere 4955 with 2,225 hours sold for $71,000. 

“And this trend is getting stronger. These 30 year tractors– it’s amazing how the perception has changed,” Peterson says. 

4.    The Machinery Pete Ratio

“This is a simple equation-- take the average auction price on any item, and divide it by the average dealer advertised price,” Peterson explains. 

While Peterson has been collecting auction price data for more than 30 years, he’s also been aggregating dealer advertised pricing for nearly 20 years. And from analyzing the trend over the past couple of decades, he says the Machinery Pete ratio (MPR) typically ranges from 71 to 76%.

“And depending on what’s happening in the ag economy, you can find items way under or way over the ratio. In 2014/2015, commodity prices fell and with too much late model equipment on dealer lots, when it was taken to auction I saw 55, 59, 60%. And on the flip side, if you get in the hot spot of 10-year-old models, you’ll see MPR much higher.” 

5.    The dos and don’ts of selling

Peterson shares two tips for listing equipment for sale. 

“The most important thing is to have lots of pictures,” Peterson says citing research done by the Machinery Pete team. “This is the No. 1 thing farmers want.” 

Also, to have more people engage with your listing, give a price. 

“When you put ‘call for price,’ you get less clicks and you leave room for assumptions to be made. When we analyze what listings get clicked on, putting a price matters.” 

6.    The emotional rules of buying/selling

Auctions are fascinating, says Peterson, citing the main reason why they make such great content for Machinery Pete TV. 

“The auction method is an effective way of selling. They are emotional events,” Peterson says. “When you are selling—the opportunity is to go the extra mile in ways to engage people personally.”
He also this insight: 75% of the time when someone shakes their head and signals they are done bidding, they bid again. 

So he gives these two big takeaways, when you are selling—personalize your item. And when you are buying—take the emotion out of the process. 

7.    Have an advance bidding strategy

Peterson notes he doesn’t want to tell people how to acquire their machinery, and over the years, he can’t help but have observed the nature of bidding strategies. 

“I will say the one thing I’ve seen be the most effective is the jump bid,” he says. 

As an example, he shares the following: “Let’s say an item is up for sale, worth $50,00. And you know $50,000 is your top number. Every auction starts bid call at 50,000—that’s just straight bracketing. So then they go to 10,000, And then the momentum kicks off. As the bidding is flying along, you know it’s worth 50,000. And you have multiple bidders in on it—And anyone who jumps in late gets attention. If the increments are 1,000, then bid 2,000 more. That way emotionally you are telling people you want it. What you are trying to do is saw off the power of the auction. Again, the power of the auction is momentum.” 

8.    Use the internet. 

“You have to get the word out on the internet–when you are having auction, and when you are selling anything,” Peterson says. “Your buyer could be from anywhere.”

9.    Rule of 12

Peterson says whatever your favorite tractor was when you were 12 years old, that will always be your favorite tractor. 

“When I’m on the road meeting farmers and speaking in front of groups, I ask them if they think this will be true in the future, and many heads shake ‘no,’ but I have to disagree. Whatever your dad, grandpa, uncle or aunt—what they were running on their farm is in your DNA.”

And so he’s seen pricing trends and buyers influenced by their own “Rule of 12.”

You can learn more direct from Greg Peterson during his recent presentation at Farm Journal Field Days. He’ll share the area where he sees a real buying opportunity for farmers right now—hint: it has to do with the MPR. And he shares more than two dozen examples illustrating these 9 trends listed above. 

How do you join?

1. Register here https://www.farmjournalfielddays.com/
2. Go to the “Stage” tab and find the session labeled "Trends and Predictions for Used Machinery Values"

You can also shop on MachineryPete.com right now---with used equipment listed for sale from across the country. 

Also, the Machinery Pete Auction Database is now open for everyone, for free!