30 October 1998




Robert Hurst



SECOND-HAND machinery prices have fallen at least 10% since last autumn, says Robert Hurst, his comments coming with the sale season in full swing.

Good kit, however, continues to trade well as farmers look for a money saving alternative to new purchases.

Sterlings strength has been the main factor, he says, hitting export demand. Economic factors overseas have also taken their toll. "Its not just that buyers in Russia, for example, are prepared to pay less – but money-market problems mean they cant afford to buy at all."

Dealers, meanwhile, are more cautious of getting caught with stocks. "The dealers used to underpin auctions. But now they are certainly buying less on-spec."

This was apparent at an auction for Coulton Farms at Apethorpe, Northants earlier this month, when a giant Claas Lexion 480 combine went under the hammer. "I just knew that wasnt going to go to a dealer – they wouldnt have wanted to have that sort of money standing in their yard."

And Mr Hursts hunch was proved right, with the two-year-old combine – the first-ever of this model to be sold by auction – snapped up by an Essex farmer for £80,000.

Indeed the bigger items have held their second-hand value better than some of the smaller goods.

"In these tough times, farmers are looking more at ways of reducing the cost of production per acre or per tonne of output. The really professional operators are investing to cut costs. The days of spending because people are awash with money and want to cut tax bills are long gone."

At the same time, though, industry rationalisation continues. "The big farmers continue to get bigger, partly because, with the pinch on, the smaller producers look more to opting out by putting their land on farm business tenancies or contract arrangements."

And unlike in the past, more are also getting out mid-career. "As industry fortunes decline, people are taking the attitude: Why should I carry on doing this, eroding capital, on the off-chance my children decide to follow into the business."

Such trends have boosted the amount of second-hand machinery on the market this autumn to record levels. "So if youre selling, be realistic about prices," says Mr Hurst.

Manufacturers are offering bigger discounts – and this has a knock-on effect of what people will pay for nearly-new.

"Setting too high reserves might just mean youre left with kit that, having sold the farm, you have no use for. You then have to think about what to do with it – and selling it privately and advertising again costs money. And machinery, unlike quota for example, is depreciating in value all the time."

The secret to getting good prices is offering well-maintained, clean and tidy goods, says Mr Hurst. The larger sales, with several major items, also tend to pull a bigger crowd, and this, in turn, usually results in higher prices for the medium-sized items.

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