Farmer's Weekly Trade Talk
24th April 2014
Both our collective York Machinery Sales and On Farm Sales this year have certainly attracted very large crowds from both home and abroad. This is probably not surprising due to generally fewer farm sales, a wider more global market place, the cost of new machinery and the diminishing amount of medium sized equipment which has been lost through contract farming and replaced by very large complex equipment. However, as a result the medium sized genuine equipment is much sought after and selling well. As an example a set of old light blue Parmiter mounted discs achieved a new level at our last sale making £2,050. Demand was generally strong for anything seasonal, particularly in the £500 to £10,000 bracket. There is still a good “in season” premium which is worth around 20% resulting in a virtual clearance of 170 fertiliser spreaders and 60 grass harrows in the Spring Sales. Any that missed the boat will now attract limited interest as attention focuses towards the grass time equipment including mowers and balers.
There are still an increasing number of foreign buyers attending the sales and although the exchange rate has not been favourable they are still purchasing around 30% of the seasonal equipment, mainly going into Central and Eastern Europe and also Ireland. However, the exchange rate has affected their purchasing power for the higher value equipment and tractors. It has been noticeable that the Eastern European buyers have upgraded in recent years and are now strong contenders for the better lots and both the Vaderstad Rapid drills in the last sale ended up being shipped to Romania.
The cost of new machinery has seen an enormous increase over the last 7 years with an average 150 HP tractor and 5 furrow plough now costing over 60% more than it did in 2007. Naturally this has further strengthened the demand for second hand equipment due to the high capital investment and cash flow issues.
However, the most difficult sector remains the big high value equipment which, as predicted years ago, has a more limited second hand demand and is struggling to find a second home. Too big and too expensive for the medium sized farm as well as often having had heavy use and being past its most reliable operating days. There has to be a harsh acceptance that this large, high value equipment is going to have a lot steeper depreciation line in order to move it on.