So far so good for ma­chin­ery sales to start 2015

Australian Farmers & Dealers Journal - - TMA NEWS - With Richard Lewis, ex­ec­u­tive direc­tor TMA

A COM­BI­NA­TION of low in­ter­est rates and the threat of ris­ing prices due to a lower dol­lar has pushed na­tional ma­chin­ery sales higher for the first quar­ter of 2015. Both New South Wales and Queens­land have seen vast im­prove­ment in sales num­bers for the first three months, com­ing off the back of a poor year last year, with trac­tor sales up 15 per cent in both states from this time last year. Un­for­tu­nately the Vic­to­rian mar­ket is not far­ing as well, with a drop of 17pc in trac­tor sales from this time last year. How­ever, over­all the sales of new and used ma­chin­ery across the coun­try is up around 12pc from this time last year. So what's driv­ing the de­mand? Cer­tainly the low in­ter­est rates on of­fer from the fac­tory credit providers such as John Deere Credit and Agco Fi­nance are tak­ing the fi­nan­cial sting out of the cap­i­tal pur­chases – at rates as low as 1.9pc be­ing ad­ver­tised the money is ba­si­cally free and help­ing the de­ci­sion­mak­ing process. Even the bank rates and non-fac­tory rates are his­tor­i­cally very low, giv­ing farm­ers and con­trac­tors some in­cen­tive to pur­chase. The drop in the Aussie dol­lar is putting up­ward pres­sure on im­ported ma­chin­ery prices, and there is a sense of ‘get in early' among buy­ers to beat the price rises that will in­evitably come. Most trac­tor companies set their pric­ing a cou­ple of times each year – around now and later in the sec­ond half of the year. That means that stock or in­ven­tory on the ground is not nec­es­sar­ily im­pacted by a drop in the dol­lar, and for­ward or­dered equip­ment can of­ten avoid cur­rency move­ments by fix­ing in a price for de­liv­ery later in the year. Most buy­ers are aware of this im­pend­ing price in­crease and may shed some light on why sales are re­main­ing strong – can it be sus­tained through the year? One look around the world shows that most of the mar­kets for new trac­tors have drooped away so pre­sum­ably we will even­tu­ally fol­low suit at some stage, and we are tip­ping this will come in the sec­ond half of this year. The bright spot in the mar­ket is in the hay and fod­der ma­chin­ery sec­tor with baler sales and early or­ders for hay tools in good shape and ex­pected to re­main in an up­ward trend through the year. De­mand for qual­ity hay and fod­der is ex­pected to re­main strong through the year and cur­rently be­ing helped along by strong live­stock prices and poor weather con­di­tions. Many of the larger ma­chin­ery man­u­fac­tur­ers are re­port­ing de­clines in sales in­ter­na­tion­ally and will be keen to meet any lev­els of de­mand, there­fore there will be some very good deals at the deal­er­ship lev­els and fac­to­ries at­tempt to keep pro­duc­tion lev­els up, even at a lower mar­gin. Used equip­ment lev­els around the coun­try have been re­duced in the past year or so as de­mand has im­proved, mean­ing deal­ers are once again keen to take trades and make a deal hap­pen for buy­ers. As we all wait anx­iously for a de­cent au­tumn break in most of the coun­try, the longer term prospect for farm­ing and agribusi­ness re­mains pos­i­tive and deal­ers are keen to do busi­ness. • De­tails: http://www.tma.asn.au/

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