Mark Stock knows a little bit about auctions and sales. The president and co-owner of BigIron Auctions and Realty has been in the business since 1984, and he has seen online auctions, land sales in general and strong interest in machinery sales go up drastically since the onset of COVID-19.
Supply chain and assembly issues for new machinery have made high-quality, used machinery a hot commodity, Stock says. Manufacturers have had challenges getting parts to complete assembly of new farm machines, so farmers with good used equipment for sale have garnered near record prices in recent months through online auctions.
“Prices on used equipment remain extremely strong,” Stock says, “and I see this continuing through at least the first half of this year.” He notes that manufacturers continue to work to catch up with demand, and commodity prices have remained strong. “Right now, the most sought-after equipment includes tractors, planters and semitrucks,” he adds.
COVID changed auctions forever, Stock says. “About the second month after COVID hit, we saw a spike in our online auction registrations on our website,” he explains. “People were testing it out. They liked the photos, the videos and the fact that we publish the machinery seller’s name. This gets our buyers comfortable with the platform.”
He notes that videos of machinery posted by BigIron help buyers to see the equipment running and working. “We even take the shields off and take photos internally, so you can really see the equipment up close,” Stock says.
Usually, there is not a lot of farmland being sold on the market, and it is in very stable hands, Stock says. But he has noticed that investment groups have been jumping back into the land markets, partly because of low interest rates.
“Prices are jumping back to those 2014 prices, which was the high-water mark,” he says. In many cases, inherited farms are held with family members, and the group must decide if they want to keep all of the land together, Stock says. If one of the family members becomes ill or dies, then family members could find themselves owning land as partners with nieces and nephews, making the business dealings more complex.
“If they want to sell, or if one of the family members wants to pass their land on to their children, they can always put the land up for sale and then buy one tract back themselves,” Stock says. “That might be a fair way to handle the situation for the rest of the family members who just need to get cashed out. When there is a farm involved, it can get complicated.”
There is certainly land selling, and it is moving at record market prices. Stock notes that Iowa farmland, in particular, is priced almost through the roof. If corn prices stay high, that has consistently proven that land prices will stay strong as well, he says.
“In most cases, we’re seeing land prices 30% up over last year, and I don’t see this changing in the near future,” Stock says.
In the next 10 years, there will be a huge transfer of farm real estate, as the baby boomers get older, Stock says. “Land will be transitioned,” he adds.
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