ON FARM MACHINERY AUCTIONS GROSS OVER £10M IN 2017 AS FARMERS CHANGE POLICY
Oliver Godfrey, Director, Cheffins comments: “The Cheffins on farm machinery auctions have grossed over £10m throughout 2017 over 25 sales as the agriculture industry continues to re-adjust ahead of Brexit.
40 per cent of on farm sales have been on behalf of farmers looking to change their farming policy, whilst 20 per cent were due to farms being sold or let and another 20 per cent followed as a result of natural retirement from farming and the remainder due to cessation of business or ill health.
Activity for on farm sales has more than doubled this year with nine sales taking place throughout 2016 and eleven in 2015. Prolonged periods of low commodity prices combined with the vast growth of agribusinesses and large contracting outfits swallowing up work has led to retirement plans increasingly being brought forward by farmers across the UK which has directly increased the volume of on farm sales. Changes in farm policy such as putting more land across to contractors or changing the output of the farm, has boosted the need for dispersal sales and as farmers grasp the auction method as the easiest way to generate the highest prices for surplus items. Compulsory Purchase Orders and their prevalence across the UK as the government continues to push large infrastructure projects has resulted in a handful of on farm sales throughout the year such as those in close proximity to the A14 widening scheme in Cambridgeshire. As a snapshot of market trends within the industry, on farm sales have taken place from Lancashire to the West Country. Whilst there are increasing numbers of farmers selling up, we have also seen an increase in prices for second-hand machinery as the market looks to cut costs and pick up high quality kit without the price tag of something new. Trade has been strong at on farm sales with purchasers from throughout the UK, Ireland and Europe attending auctions country-wide. The highest value sale of the past twelve 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.
Selling everything from spanners through to combines, on farm sales offer the opportunity for a completely clean slate for many farmers and landowners and we forecast an increase in on farm sales across 2018 as Brexit negotiations create further uncertainty within the industry. We already have a strong calendar of sales in locations nationwide.”
SECOND HAND MACHINERY SALES PEAK IN 2017
Bill Pepper, Director, Cheffins reports: “Sales throughout 2017 have risen in excess of 100 per cent for some months and have been at their strongest since the previous peak in 2013. Overseas purchasers have driven the market as they continue to make the most of the low pound since the Brexit vote. We have seen buyers from Europe in their droves throughout the year as old faces return to the sale ground every month and newer buyers also come to the market to make the most of the relative savings to be had. Similarly, the strength of the US dollar has led to an increase in buyers from America, both bidding at the sale and online. Regular overseas buyers are now frequently spending six figure sums on a monthly basis with the Spanish being some of our most active buyers, with one purchaser buying over 30 tractors in one sale, amounting to over £500,000.
As prices for new machines continue to grow, more buyers are turning to high quality second-hand items and the competition between overseas purchasers and UK-based buyers has had a knock-on effect on prices achieved for the best used kit. This has also been compounded by a lack of second-hand machinery on the market and the relative reduction in supply when compared with previous years. John Deere tractors have tended to be the default choice for the majority of buyers throughout 2017, whilst Massey Ferguson and New Holland have remained the models of choice for Northern and Southern Ireland in the main. JCB Fastracs continue to sell well, with most of these machines being sold to Poland.
We forecast that 2018 will continue in much the same vein with price rises continuing for quality second-hand machinery and hopefully an increase in stock throughout all levels of the market. As Brexit negotiations loom, the agriculture industry will be waiting for news on support payments and whilst this may end up having an effect on the purchase rate of brand new machinery, we expect that it ought to help the second-hand market as farmers and landowners look to cut costs in this time of uncertainty.”
For more information contact the Machinery team on 01353 777 767.