In­dus­try View

Out­look bright for trac­tor sales

Farms & Farm Machinery - - Contents -

Fol­low­ing on from what was an out­stand­ing 2016, sales of agri­cul­tural trac­tors ex­pe­ri­enced a con­sid­er­able bump in Jan­uary, al­though much of this has been put down to an over­hang from the pre-Christ­mas pe­riod.

The smaller un­der-40hp ‘Leisure’ cat­e­gory dom­i­nated the month, up 52 per cent on the cor­re­spond­ing month last year. Much of this ac­tiv­ity oc­curred in the south­ern states, with Queens­land and Western Aus­tralia re­port­ing quiet months.

There was solid move­ment in the 40-100hp range, up 28 per cent while the larger 100-200hp and above-200hp cat­e­gories were quiet.

Not sur­pris­ingly, sales of har­vesters were slow, with a small num­ber of baler sales also re­ported.

The sale of out-front mow­ers con­tin­ues to roar, up an­other 15 per cent on the same time last year due to the large amount of grass around. This is also hav­ing an ef­fect on the smaller trac­tor sales mar­ket as cus­tomers move to re­new their stock.

Look­ing ahead, ex­pec­ta­tions are once again high for an­other strong year in the agri­cul­tural equip­ment mar­ket.

Man­u­fac­tur­ers and Im­porters con­tinue to see the Aus­tralian Mar­ket as one of the few bright spots on a global ba­sis and, as a re­sult, are ded­i­cat­ing sig­nif­i­cant ef­fort to suc­cess in this re­gion. This is be­ing played out in the for­ward order pro­grams be­ing of­fered in to­day’s mar­ket.

Low (of­ten 0 per cent) in­ter­est rate deals are pre­dom­i­nant in the smaller-size seg­ments. Ini­tia­tives in­clud­ing pre-sea­son ser­vice pro­grams are be­ing of­fered in the larger end.

This is in turn lead­ing to very strong pro­jec­tions oc­cur­ring at deal­er­ships across the na­tion. In­deed, many deal­ers are re­port­ing that de­mand is a strong as ever and fore­casts are be­ing in­creased as a re­sult.

Deal­ers are re­port­ing con­tin­ued strength in the beef, sheep and veg­etable seg­ments, along with a re­turn of in­ter­est from the dairy sec­tor.

In­vest­ment in land and in­fras­truc­ture is con­tin­u­ing at a great pace and act­ing as a sig­nif­i­cant en­abler to con­fi­dence lev­els, in turn lead­ing to a will­ing­ness in the mar­ket to pur­chase.

We are see­ing a con­tin­u­a­tion of a more so­phis­ti­cated ap­proach to the use of agri­cul­tural equip­ment by farm­ers and con­trac­tors as they con­tinue to adopt a greater fleet man­age­ment fo­cus.

Be­cause farm­ers are so much more fo­cussed on pro­duc­tiv­ity and are con­stantly seek­ing to avoid down­time, the im­por­tance of lock­ing in known hourly op­er­at­ing costs is crit­i­cal.

This is see­ing more users trad­ing ma­chines out at around the 3500-4000-hour mark prior to any ma­jor re­pairs or re­fur­bish­ment re­quire­ments in much the same way as fleet op­er­a­tors do in other in­dus­tries.

These low-houred ma­chines are then eas­ily traded, en­sur­ing a healthy cy­cle ex­ists.

As we re­ported last month, stocks of used equip­ment re­main low and deal­ers re­main ready to deal.

With an en­cour­ag­ing weather out­look on the hori­zon, con­tin­ued low in­ter­est rates and a rea­son­ably sta­ble Aus­tralian dol­lar, there is ev­ery rea­son to be­lieve that 2017 could be an­other record year.

Gary Northover is ex­ec­u­tive di­rec­tor of the Trac­tor & Machin­ery As­so­ci­a­tion of Aus­tralia (TMA). He can be con­tacted on (03) 9867 4289 or gary.northover@tma.asn.au

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