Second hand machinery is enjoying an upsurge in demand as a combination of favourable exchange rates for overseas buyers, stronger commodity prices and a lack of stock has led to the highest sales figures since 2014, when the market was at its peak, for one of the world's largest machinery auction companies.

Figures from Cheffins monthly machinery sales, based near Ely, Cambridgeshire, show their machinery sales throughout the second quarter of 2018 are 13% up on the same period as last year to £10.07m, against only a marginal 3% increase in stock. Notably, higher prices were witnessed across a range of makes and models of tractors, combines, plant and other machinery.

Most sales see 80% of the stock destined for overseas with buyers from around 30 different companies competing for the best kit. Over the past three months, the top five buyer nationalities were from Ireland, Spain, Bulgaria, Poland and Belgium with a total of £4,030,000 worth of machinery being sold to these countries.

UK-based buyers have returned to the market too with more than £2m worth of machinery being sold direct to domestic purchasers in the past quarter.

“As the future of subsidies for UK farmers continues to be uncertain and prices for new agricultural machinery rises year-on-year, we have seen a return of domestic buyers within the second-hand market," said Cheffins director, Bill Pepper.

"These buyers are competing against overseas purchasers who have continually benefitted from the weak pound since June 2016. The rise in gross sales goes to prove the strength of the second-hand market as a cocktail of high demand against a lack of supply has led to competitive bidding throughout the industry. In fact, the June sale saw the highest total grossed since 2014.

"Ireland has been the strongest buying force in the market this quarter, topping Spain which led the charge in the same time frame last year. This is the result of Ireland’s strong dairy sector and the strength of the euro.

"Eastern European buyers have also increasingly come into their own as their burgeoning agricultural sectors sees demand for good quality kit without the high price tags to match.

"The construction sector also remains buoyant which has been illustrated by the percentage of plant stock selling, particularly to Asia and the Middle East,” concluded Mr Pepper.

On-farm machinery sales have also proved a huge success following with the strong BPS payments. With six on-farm auctions having taken place in Q2 2018, total gross sales have topped £3.4m for some 1872 lots, from sales throughout Herefordshire, County Durham, North Yorkshire, Cheshire and throughout East Anglia. Top price in the last quarter was £149,000 paid for a 2013 John Deere S680 combine harvester.

Of the six sales which took place in the past three months, the majority were the result of UK farmers entering into joint ventures with neighbouring landowners or trading up farm machinery for larger, higher horse powered kit as acreages increase. The on-farm sales have also seen increasing numbers of UK farmers in attendance, looking to pick up top quality second-hand items in place of buying new.

Bill King, Chairman, Cheffins comments: “Higher BPS payments and rising commodity prices have created favourable conditions within the market which has led to a number of farmers entering into joint ventures or releasing capital from farms in order to trade up machinery or buy more land.

This has directly led to a series of high value on-farm sales as UK-farmers begin to bounce back from the uncertainty experienced following the Brexit vote. Whilst it cannot be denied that the future of subsidies remains unclear, the combination of positive factors within the market has helped the industry to start to return to normal.

"In a similar vein, we have seen a marked increase in the number of end-users attending auctions in order to trade up kit, illustrating improved confidence within UK agriculture.

"Another driving force in the market for second-hand machinery is UK-based dealers attending on-farm sales as they look to underpin stock following high demand over the past six months. It has become clear in recent months that many farmers are not stopping expansion plans due to Brexit and the spring in farming’s step is a welcome change from the doom and gloom which has been sensed by many since June 2016.

"We have also seen an uplift in the numbers of overseas buyers at on-site sales, from Eastern Europe, Spain or Ireland in the main, and the competition between these and UK buyers has helped to push up prices for the best quality machinery. The option for online bidding at on-farm sales has helped to increase Cheffins’ customer base and ensured that these sales make as high prices for items as within any other environment. The number of on-farm sales conducted by Cheffins has doubled in the past three years and with an already busy diary for the remainder of 2018, we expect these to continue to rise in popularity.”

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