The title sounds like a logical question, but the reality is this ongoing economic crunch might now be enhancing the farm auction market.
Allen Henslin of Henslin Auctions Inc. in Bird Island, Minn. is savvy about what’s happening in the farm auction market. “Because of Covid-19 we’ve now actually switched from live on-line auctions to strictly timed or virtual auctions,” Henslin said. “When the pandemic hit we saw our registered bidder numbers go up. We saw strong numbers go up throughout the spring.”
“We’re now able to again do live auctions with people doing social distancing. We’ll continue to have hand wash stations and masks. We’ll continue to go by the guidelines of the state and federal government.
“But our auctions have continued strong. It helps to have a good on-line bidding platform also. But we’re seeing some very strong numbers as time moves on. I wasn’t certain what would happen; so this is very encouraging for us and for farmers looking at buying or selling. Yes, good real estate continues to move. Much of that because prevailing low interest, I’m thinking.”
Henslin added land prices are not necessarily going up, but are definitely steady and not plunging downward. “We’ve sold properties in all area counties around here. Sellers have been happy; buyers have been happy. Obviously low interest rates are key. But also we’ve got some very good lenders in this area … some very solid banks ready and willing to work with our buyers.”
“Today on a good farm that is pattern tiled, $8,000 (per acre) might be the very top. The right price more likely is either side of $7 today.”
Henslin Auctions isn’t bashful about conducting a farm auction virtually anywhere in America. “We just added to our calendar an auction out between Portland and Eugene, Oregon. This will be a timed on-line auction for a collection of antique diesel and gas ‘hit-and-miss’ engines.”
How did that happen? Because on May 16 Henslin did a similar auction for Donald (Red) and Marcella Goodburn in the Mankato area. “The person out in Oregon, Jim McCracken, was a good friend of Red Goodburn and had posted up the Goodburn on-line auction,” Henslin explained. “McCraken called us the night of the Goodburn auction and asked if we’d be interested in doing his auction — another antique tractor similar to Goodburn’s collection. McCracken was impressed the way the sale went for Red Goodburn. This was an on-line sale. We sold items into Texas, Illinois, Iowa, Missouri. Items just sort of went all directions.”
“In Oregon we’ll do strictly a timed on-line auction. They’re in a tighter facility which can’t handle very many people and parking. But we’ll have preview days. We’ll be dealing with some Sticklie, some Stovers and some very rare hit-and-miss gas engines. If anybody wants, they can go to our web site (www.henslinauctions.com) to preview that Oregon auction coming up.”
Steffes Auction out of Litchfield and Moorhead, Minn. also reports 2020 is looking like a good year. “Land prices have stabilized. Some low fertility ground — not well tiled — have dropped off a bit. But good farm ground, black dirt and well-tiled is still bringing good money,” says Randy Kath, Steffes sales representative.
With record crops being projected, lots of 2019 corn still on farms, and the livestock economy struggling, what does Kath see on the horizon? “We’re optimistic because we’re seeing some excellent prices on used equipment. Yes, still lots of guys looking for good used equipment. They just can’t afford the brand new stuff these days. I think prices on good equipment will stay strong through this December. We might see some disparity after the first of the year.”
Kath added he doesn’t see farm bankruptcies hitting a high level come the end of 2020. “I really don’t at this point. Those hanging by the wayside are gone. But I know banks and lenders are willing to work with guys through these tough times. Today I believe more people are willing to help out. I believe things are going to get better sooner than later.”
“There will be a recession — we know that. But at some time it’s going to correct itself. No, I don’t want to say when. You’ve seen these bad times come and go so change will continue in our rural economy. Change keeps appearing … that’s just the nature of younger farmers these days. But at this point I’m clearly seeing used equipment prices strong through the rest of his 2020 calendar year.”
“If there’s any group with the tenacity and hard-work resolve to make it work — even in difficult times — its our farmers. They don’t want to quit. There isn’t a farmer I talk to who doesn’t love what he is doing and is willing to keep pushing forward for himself and the next generation.”
As with Henslin Auctions, the “live auction” platform for Steffes cranks up again in July. “We’ve got a tremendous amount of on-line bidders these days, so we’ll leave it up to the sellers. If they want to host live bidding again on their farm we’ll let that be their call. Most of our guys scheduled for auctions this summer are absolutely on board with going back to the live platform coupled with on-line bidding too. Most folks want to get back outside. They’ve been cooped up too long.”
You’re in a very competitive business. How do you survive? “It’s got a lot to do with being honest, and getting the work done. From start to finish, we want to help a farmer — with his an appraisal, even a successor plan; then doing his sale and follow up with him after his auction. We want to be there from the beginning to the end, helping him anyway we can,” summed up Kath.