19 August 1997

Second-hand worth less than in 96?

Autumn marks the busiest times for machinery and equipment auctions. But few people are expecting prices to reach the levels of 12 months ago. The prolonged harvest has also hit attendances at early sales, as Tim Relf reports

IF YOURE about to sell second-hand kit, the chances are it wont make as much as it would have a year ago.

Thats the view of auctioneers, who suggest lower farming profits, and the strong £ sterlings effect on exports, will hit demand.

Bob Hall of Cheffins Grain and Comins says its taking a bit of time for prices to adjust to the currency movements. But sellers are now adjusting their expectations.

"The overseas market hasnt gone away, however – its just been holding off," says Mr Hall.

Brown and Cos Jim Major says there will be lots of machinery and equipment on the market this autumn. "Throughout October, therell probably be five dispersals a week."

Many follow land sales, he says, with the remainder prompted by business reorganisations – a switch to contract farming, for example.

According to Andrew McFarlane Holt of Alexanders, currency movements have hit trade since the spring, discounting values by about 10%.

Demand will, however, be boosted by interest from farmers who have expanded their acreage in recent years. "Theyll need extra kit to service extra acres."

In years such as this when harvest is late, panic can set in, prompting farmers to source extra equipment. "Theyre watching the clock and are keen to buy peace of mind.

As well as ploughs, this can be reflected in the demand for seed drills – which have been known to make three or four times the expected level, because people are aware time is passing, says Mr McFarlane Holt.

A lot of farmers will have upgraded machinery in the more prosperous recent years. "But good items of kit – those that are well-maintained and with a good service history – will always sell."

Proceeds from machinery sales often represent the nest-egg when farmers leave the industry. With a combine, two or three tractors, cultivation equipment and miscellaneous items, a dispersal from an 800-acre farm can gross over £150,000.

Theres currently a lot of inquiries for grain trailers, says Mr McFarlane Holt. "The AS Marston is popular in this area, partly because it holds its value. A 10-year-old one might be worth over £2000, not much less than half its new price."

Despite the caution, auctioneers, also point to beneficial effects lower farm incomes can have on demand for second-hand kit, as buyers switch away from new.

Dreweatt Neates Simon Pallett says people always bid with confidence at a genuine dispersal sale. "People like to be able to talk to the farmer, and know the history of the machine."

Mr Palletts most recent sale was last Tuesday, at which the top price was £21,000 for a 1995 John Deere 6300 tractor with a loader.n

Theres no shortage of machinery and equipment set to come on to the market in the coming months. But prices may struggle to reach last years levels.