What’s driving the rise in used farm machinery purchases?

Weather and government grants were among the factors influencing whether farmers choose new or used farm machinery, according to a new survey by AMTEC.

Farmers who responded cited purchasing price and condition among their top concerns (26% and 25% respectively), but just 2% said financial support was key factor.

However, 60% said they would delay a machinery purchase to wait for a Sustainable Farming Incentive grant approval, while 40% were not influenced by grants.

77% of farmers who responded said used machinery becomes more enticing when SFI grants are not applicable.

Since the survey was conducted, the government has announced the sudden closure of SFI applications. 

Other factors mentioned when making machinery purchases included brand reliability, machine availability, dealer support and aftersales care, warranty, and dealer reputation. 

AMTEC expert Jason White commented: “Whilst government support – through grants and SFI schemes – have helped farms transition from the old payment system, it is limited in the machinery that it supports and might not always suit a particular season or conditions. 

“When this arises, establishing a crop is the most important thing, so farmers will look to used machinery outside of the schemes to meet their requirements.”

FETF impacts

Inflation was another factor prompting farmers to turn to used machinery over new. 69% said the rising costs of new agricultural machinery, driven by inflation, has compelled them to opt for used equipment instead. 

Meanwhile, over three quarters (77%) cited resale value as a key influence and more than two-thirds agreed that maintenance costs are a huge deciding factor when choosing between new and used. 

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Mzuri’s general manager, Dani Bond said the FETF grants had a big impact on the industry, disrupting sales patterns and distorting the market. 

“Anticipation of funding windows led farmers to delay purchases for months, creating long dry spells followed by unmanageable surges in demand – turning a seasonal market into a cycle of feast or famine. 

“The knock-on effect was even more severe in the second-hand market. With grants offering up to £40,000 for new machinery, trade-in values plummeted overnight, as buying new became only marginally more expensive than used. 

“These disruptions continue to ripple through the industry, and with looming inheritance tax changes for farmers, further instability seems inevitable. 

“Despite repeated efforts to raise these concerns with MPs, Defra, and ministers, there was little recognition of the real-world impact on businesses.”

Optimism for the future

But Joe Seels, a beef and arable farmer with a TikTok following of 64.5K, said there is optimism in the industry that things will pick up this year, after a disastrous 2024. 

“However, no one I have spoken to believes it will return to the same level post-covid,” he added. 

“In our industry beef prices are good but, that is not the case in other sectors, with arable farmers being particularly hit by falling prices, and unprecedented weather conditions.”

Sustainability

Despite the growing cultural shift towards sustainability, farmers were divided on environmental considerations and sustainable farming when it comes to making purchasing decisions. 

This split reflects concerns over the profitability of sustainable practices, knowledge barriers, market demand amid the cost-of-living crisis, and uncertainty around UK government policies and subsidies.

65% of respondents said carbon footprint is their least concern when purchasing equipment. 

Over 75% expressed a neutral stance (slightly/moderately) on environmental considerations influencing their purchasing decisions.

Heavy rainfall in 2024

Weather, unsurprisingly, was a key consideration. 

Heavy rainfall across the UK in early 2024 severely disrupted farming operations, and farmers had to switch up their strategies to cope with the changes. 

One farmer said: “If, like this year we are drilling in a very wet autumn, I went and bought a second-hand drill capacity, allowing me to drill more acres, as a supplement to my regular drill, and therefore it needed to be as cheap as possible. 

“Because we want our ground to have good infiltration but a strong carrying capacity we have simplified and dramatically reduced our cultivation strategy to a very low till.”

The unpredictable wet weather of 2024 affected 83% of decisions for machinery replacements. 

This is unsurprising, given the appeal of cheaper, readily available equipment with a proven track record, AMTEC noted. 

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Farmers are taking a pragmatic approach to equipment purchases, recognising that extreme weather events are relatively rare occurrences.

Rather than investing in expensive machinery with sophisticated features that could require costly maintenance, they prefer to purchase more affordable equipment that can adequately handle challenging conditions when needed. 

This strategy allows them to manage weather-related challenges while maintaining the option to resell the equipment afterward, proving to be a more cost-effective solution for their operations.

In conclusion, AMTEC said the report shows an upward trend for used machinery purchases, while weather changes are influencing decision-making, and more readily available funding is needed to support farmers.

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