The average time on market ranged from 5.8 months for class 4 models to 8.3 months for class 8 combine models. Due to low volume for class 10 combines, classes 9 and 10 were combined.
Key Takeaways for Decision Makers
SELLERS: Take advantage of the short supply of smaller combines on the used market – class 4 models in good condition are positioned to sell quickly.
BUYERS: Expect a buyer’s market for class 7 and class 8 combines through the first half of 2015.
When analyzing the behavior of heavy equipment resale markets, one often-overlooked factor is the length of time assets remain on the market. In part one of a series for combines, we establish that the average time on market differs significantly between size classes.
While not every online listing includes a serial number, EquipmentWatch has collected over 24,000 unique serial numbers for combines listed for sale since January 2013. By tracking each serial number, analysts can determine when a unit was first listed for sale, the length of time for which it remained available for purchase, and the approximate date on which it left the resale market. As it is not always possible to determine whether the unit was purchased or whether the current owner removed the listing, the length of time a unit spends on the market does not necessarily correspond to the length of time it takes to sell the unit.
Data for the study was collected over a two-year period, and it is possible for a combine to pass through multiple sets of hands in that time. To prevent multiple listings or sales from impacting calculations, factors such as usage, seller location, and dates were also included in the analysis.
For example, a given Gleaner R65 with 2,000 engine hours was listed for sale in Kansas in March of 2013. A year later, a unit with the same serial number and 2,200 hours appeared on the Nebraska market. In this case, the combine in question was likely sold in 2013 and then listed for sale by its new owner in 2014. For the purposes of this analysis, the unit will have two separate listings, each with its own start and end dates.
Across all combine classes, the average length of time on the market was 7.7 months. Time in months was positively correlated with combine class. A Spearman rank correlation, which allows testing for an ordinal variable such as class, yielded a correlation coefficient of 0.83. This indicates a strong positive association between combine class and average time on the market – as combine class increases, the average number of months generally increases as well. Combine class is also related to factors like price and year of manufacture, which can all play a part in how quickly an asset sells on the used market.
Compared to other groups, class 4 models were relatively uncommon. Together, class 7 and class 8 combines comprised over 56% of models on the used market.
On average, class 4 units were listed on resale sites for just 5.8 months before being sold or removed. The limited supply worked in sellers’ favor – models in this class represented only 4.4% of combines on the used market in 2013 and 2014. Class 5 combines were also listed for a relatively short period of 6.9 months. Class 6 units held more sizeable market share (20.3%) and were listed for 7.3 months on average, slightly lower than the overall figure.
Class 7 and class 8 combines each accounted for 28% of available units and had an average time on the market greater than 8 months. With so many class 7 and 8 combines listed for sale, buyers had a wide selection from which to choose, and soft commodity prices left producers wary of spending on large equipment in 2014. As a result, the more powerful combines took longer to sell or never sold on the private resale market at all.
Class 9 and 10 combines were an exception to the trend. Both are relatively new to the market, and as horsepower ranges for these classes are not yet defined by the Association of Equipment Manufacturers (AEM), models in this group were categorized according to manufacturer designations. The first manufacturer-defined class 10 combine was introduced in 2010, and models in that range have not entered the resale market in significant numbers. The low resale volume of class 9 and 10 combines makes interpreting the averages challenging. From 2013 to 2014, the average length of time class 9 and 10 models were listed for sale was not significantly different from class 6 models.