A cocktail of doubts over the profitability of farming enterprises, rising costs of new machinery and favourable exchange rates have led to an increase in on site dispersal sales hosted on behalf of farmers across 2017. With increased demand for second-hand stock, machinery sales are seeing rising prices with Cheffins on site sales topping total values of over £4m in the first six months of 2017.
This increase represents double the number of sales taking place on farm from January – June in 2017 when compared with the same time frame of 2016, coupled with an increased turnover of 200 per cent, indicative of shifting buying patterns amongst the farming community. Whilst the Agricultural Engineers Association is reporting increases in new tractor registrations in May 2017, Cheffins is seeing second-hand stock continuing to be the go-to option for both farmer and export buyers.
Bill King, Chairman, Cheffins, comments: “Many of the sales conducted in the past six months have been complete dispersal sales following the farmer’s decision to retire and to enter into contracting arrangements. We have had other farmers who are re-structuring following changes to farming policy and we have seen an increase in those reviewing or bringing forward retirement plans as a result of faltering profitability. Whilst commodity prices have improved, this has been countered by increasing input costs and this, coupled with the increasing costs of new machinery, has had a knock-on effect on the demand for second-hand equipment. Just as input costs have risen due to a weaker pound and more expensive imports, export trade has been strong which has seen a sharp rise in the levels of second-hand machinery exported to Europe. This is affecting supply and we are now seeing intense competitive bidding for the best stock on offer.”
The highest value sale of the past six months was for Whittinghams Farm Supplies in Preston, Lancashire which saw over £1.6m-worth of agricultural machinery sold as a dispersal auction. This was on behalf of the largest single vendor of modern equipment in recent years following Whittinghams Farm Supplies decision to cease trading.
Bill King continues: “We have seen an increase in the numbers of farmers turning to on site sales as they come to realise that auction is the most profitable way to dispose of machinery and buyers looking to acquire good quality second hand kit as an alternative to buying new. We have over 20,000 buyers on our books from both the UK and abroad and the competitive nature which the auction process encourages can help to increase prices achieved. We have seen some strong prices over the past six months, including £116,500 paid for a 2015 Claas Lexion 620 Combine Harvester and £104,500 paid for a 2013 AMAZONE Pantera 4001self propelled sprayer.”
Cheffins Cambridge Machinery Sales has also seen a similar trend with increased turnover in the first six months of the year from £15,800,000 to £18,000,000.
Bill King says: “It is not surprising that this trend is also being seen across our Cambridge Machinery Sales as trade to Europe has been particularly strong in the past six months. Since the Brexit vote some 12 months ago, with the resulting devaluation of the pound we have seen many new and returning overseas purchasers attend the monthly auctions, and their increased buying power has certainly boosted sale results. Like all other collective auctions, we are contending with lower stock levels but both buyers and sellers have been taking full advantage of the favourable trading conditions. This situation looks likely to continue whilst there is increased uncertainty surrounding Brexit negotiations.”
On site sales have taken place across the UK, including three sales in Yorkshire, a number in the eastern counties and also in Berkshire.
Cheffins has on site sales planned from September onwards in Cheltenham, Kettering, Welwyn Garden City, March and Cambridge, amongst others.
The next on site sale will be on the 13th September for P. Crawford close to Welwyn Garden City. Cambridge Machinery Sales next auction is on Monday 7th August.
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