Auction company Cheffins, which is best known here in Ireland for its huge monthly tractor and machinery sales across the water in Cambridge, says that machinery sales are proving profitable for farmers. Its on-site machinery auctions have turned over £4 million (€4.5 million) during the past six months.
On-site auctions involve the company travelling to the premises of a farmer or contractor – typically for a fleet dispersal sale.
According to Cheffins, 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 during 2017. With what it describes as “increased demand for second-hand stock”, the company says that machinery sales are seeing rising prices.
This increase, says Cheffins, represents double the number of sales taking place on-farm from January-to-June 2017, compared with the same period in 2016. Whilst the Agricultural Engineers Association (AEA) is reporting increases in new tractor registrations in the UK, Cheffins is seeing second-hand stock continuing to be the “go-to option” – buoyed by demand from export buyers.
Bill King, Chairman of Cheffins, explained: “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.”
King continued: “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.
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 4001 self-propelled sprayer.
Cheffins Cambridge Machinery Sales – the company’s well-known monthly auctions at its own premises – has also apparently seen a similar trend, with increased turnover in the first six months of the year from £15.8 million to £18 million.
King said: “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. 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.
A cluster of used Fendt tractors were sold at a recent Cheffins on-site auction in the UK. The 2013 Fendt 716 Vario with 3,911 hours on the clock (on the far right) fetched £64,000 (excluding VAT and fees). The 2006 Fendt 714 Vario TMS with 11,812 hours showing (second from the right) sold for £22,500.
The 1993 Fendt 309 Farmer Turbomatic (17,539 hours) and the 1997 Fendt 395 Tool Carrier (16,990 hours) sold for between £12,200 and £14,500.
