Agricultural sector sees rapid rise in digital auctions

Troostwijk Auctions drone foto

Uncertainty leads to record growth in digital auctions in agricultural sector

• Number of agricultural entrepreneurs quitting rose 17 percent 
• Proceeds from agri-auctions 17 million euros higher than previous year
• Average age of quitting entrepreneur decreases

At a time when agricultural entrepreneurs face growing uncertainties, rising commodity prices and shrinking margins are a daily reality that is irrevocably changing entrepreneurship in the Dutch agricultural sector. These pressures are leading farmers to reconsider their entrepreneurship at a younger age than before. The question of whether they still want to or will be able to compete with the ever-changing market dynamics and climatic challenges in the next 20 years comes up more often in the conversations between Stef Hooijman, Account Manager Agricultural at Troostwijk Auctions, and agricultural entrepreneurs.

Record year
In 2023, Troostwijk Auctions organized 189 auctions of agricultural machinery with more than 57,000 lots and 857,290 bids; a growth of 93 percent compared to the previous year. This is also reflected in the substantial growth in revenues: from 25 million euros in 2022 to an impressive 42.2 million in 2023. That’s seventeen million euros more than the year before. The number of Dutch entrepreneurs auctioning business assets also increased by 17 percent. According to Troostwijk Auctions, this is partially due to the growing uncertainty among agricultural entrepreneurs. On the other hand, the digital auction house notices that online auctions are becoming more common within the sector. "A growing group of agricultural entrepreneurs are realizing that by selling their business, they are taking matters into their own hands," Hooijman says. "We do notice that the average farmer often mistakenly thinks he has too few machines to auction, when entrepreneurs can auction from as little as one machine. So within this group there is still a lot of unused liquidity in storage."

Quitting agri-entrepreneurs increasingly younger
The sharp increase in the number of agri-auctions has partly to do with the prevailing uncertainty among agricultural entrepreneurs. "When talking to our clients, I find that uncertainty is high and an increasing number of farmers see little perspective," Hooijman says. "For example, ten years ago when I auctioned off a contracting business, an entrepreneur was often 60-plus, with no successor. Today, it's entrepreneurs in their forties who wonder if there’s still a future in the agricultural market or doubt whether they want to keep doing the work for the next 20 years." Agricultural entrepreneur Johan van Weert (52), who closed the doors of his contracting business after 26 years, explains: "The market is shrinking steadily and more and more farmers are quitting their businesses. A trend that I think will continue in the coming years. After years of working in this sector, I decided to quit my business for this reason. I saw insufficient perspective to keep this up for years to come."

Tractors in demand
In 2023, 3,444 lots were offered within the tractors segment. In addition to tires and rims, 4-Wheel Drive tractors and old-timer tractors were particularly in demand. In addition, Front Loaders and accessories also did well in 2023. Most buyers came from Europe, especially Belgium, Poland, Germany and Romania. "Tractors are real attention-grabbers within agricultural auctions, both the old-timer tractors that are especially popular among enthusiasts and the tractors that come directly from work," Hooijman said. "Dutch farmers frequently bid on well-maintained tractors, typically up to five years old. These tractors are sold directly after use, ensuring good working condition, and give farmers a near-guarantee of a long-term investment. The slightly older tractors, with more running hours, are mostly sold to agricultural entrepreneurs from Eastern Europe, such as Poland or Romania."

Increasing focus on international markets
It’s not just changing market dynamics, but also climate challenges are creating uncertainty among farmers. "Nitrogen and water quality are increasingly going to have a strong influence on uncertainty within the agricultural sector," Hooijman says. "As a result, we expect the sales market for agricultural equipment to increasingly shift beyond our national borders. We’re seeing increasing demand from abroad, with bids coming in from as many as 175 countries."