Archive Article: 2000/06/30
AUCTIONEERS
COMMENT
BILL KING
(Cheffins Grain & Comins)
Cambridge Machinery Sales
EXPORT trade for tractors and machinery has recovered considerably. Almost 500 tractors went under the hammer at this months Cambridge sale with the rising value of the k fuelling a noticeable increase in demand. Buyers have been quick to react to the change in exchange rates.
While the home market for later, high horse-powered tractors remains good especially for Ford, Case and John Deere, trade for older Massey Ferguson models to the Middle East was considerably better than in recent months, despite the problems that some countries are facing.
Massey Ferguson 135s are the desired marque of tractor and many of these will now be working in warmer climates. The sensitivity in the machinery market was highlighted by the fact that as the £ weakened further during the course of 3-4 days before the sale, exporters arranged flights and travel arrangements to ensure they were at the sales Sutton venue to take advantage of the currency movements.
Irish dealers were particularly stronger than they had been for some time purchasing later, better quality tractors.
The supply of used stock has been helped by the large number of on-site farm machinery auctions Cheffins has held over the past six months, as the trend for amalgamation and contract farming continues. Prices are strong for later high specification, low-houred tractors and for good cultivation equipment.
The offer of 0% finance has not always tempted farmers looking to replace it and consequently the demand has been good for this later machinery. Older and out of fashion tackle is more difficult to place and there is an ever widening gap between this and newer kit.
On a seasonal note, the trade for combine harvesters has also been difficult, although it was encouraging that three combines were sold on one day at a recent sale near Saffron Walden; a result of three farmers merging their farming interests. It is clearly a supply and demand factor, as farmers co-operate locally with high cost machinery, which often means that a larger combine will cover the land two outfits have previously covered. The combine is often the first item of machinery to go when looking at running and depreciation costs and it can also be worth considering the services of a contractor or hiring which is also becoming a popular alternative.
Nevertheless, many farmers prefer the flexibility of combining their crops rather than rely on a contractor. During the course of the spring and early summer sales the majority of the purchasers of combines at auction were farmers; an indication that many are expanding their farming operations and requiring either a bigger machine or extra capacity.
The cost of later combines at auction can reduce the number of potential bidders, as there are only so many farmers able or ready to pay cash on the day, as is required when purchasing at auction. However, buyers can arrange finance prior to the auction to purchase high cost items as long as the auctioneers are aware of pre-sale arrangements.
The export market for second-hand combines is clearly difficult in light of the £s strength. Traditionally, these combines consist of earlier, less expensive models; eg New Holland 8060/8070s would be exported to Eire. The demand is still strong but UK prices have not fallen enough to allow substantial numbers to be shipped.
As the £ has strengthened, the tendency has been for manufacturers of foreign machinery to reduce prices for machinery imported into the UK but this has had a knock-on effect on residual values of second-hand machinery.
If the £ dropped further, it would surely release large quantities of older second-hand machinery. A lot is required by second and third world countries and later machinery goes into Europe. Meanwhile, the problems facing British agriculture and manufacturers continue to stem from the strong £. *
A weaker £ has helped the export trade pick up quickly; combine sales are still difficult, says Bill King.