AN INCREASE in machinery auctions, particularly computer-generated on-line auctions, will create a w

28 Sep, 2006 07:00 PM
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The net effect of a wholesale market should see more realistic values placed on trades in the future and remove uncertainty from the industry.

Trade values always have been hit and miss based on the market atmosphere (good year, bad year) and a farmer's ability to get machinery dealers to "sharpen the pencil" and provide a higher value.

Dealers are guilty of paying too much for trades based on competition and the desire to secure the deal.

What auctions effectively will do is lower trade values, which in the short term will deliver more pain to dealers who will probably lose money on existing used equipment in their yards.

But in the longer term, more orderly pricing will send a strong message to farmers that ageing equipment will have no commercial value and therefore will not be accepted as a trade.

It is early days but it is likely more dealers will avail themselves of on-line or site auctions to quit used inventory.

Esperance John Deere dealership Ratten and Slater held what it called an inaugural reduction sale by auction in an attempt to quit used combine harvesters, tractors, tillage and spraying equipment.

The latest auction, held by McIntosh and Son and which ended last week, saw 80 used machinery items sold out of 110 on offer.

Importantly for McIntosh and Son, 24 used combine harvesters were sold, to reduce pressure on used inventory levels.

McIntosh and Son spokesman Stuart McIntosh said it had had the desired result for them.

"We've cleared the decks to make room for new trades and we're ready to do new business across the board," he said.

"Farmers are looking forward to next year and I've picked up a real positive tone at all the machinery field days this year.

"It has been tough, but farmers just want to get on with it because they have confidence in the industry."

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