steady as she goes

Trac­tor sales are be­gin­ning to slow from their record lev­els

Farms & Farm Machinery - - Industry View -

It would ap­pear that the steam is be­gin­ning to run out for sales of agri­cul­tural equip­ment across Aus­tralia with sales steady­ing and sen­ti­ment be­gin­ning to soften.

It is clear that the var­i­ous well-pub­li­cised weather events that have been oc­cur­ring across the coun­try are now hav­ing an im­pact as ex­pec­ta­tions for an­other record sea­son have been well and truly damp­ened.

Septem­ber saw trac­tor sales in line with Au­gust and 10 per cent ahead on a year-to-date ba­sis. This month was dom­i­nated by the 100-200hp cat­e­gory, which was up 17 per cent and ahead 13 per cent year-to-date.

This seg­ment seems to be driven by ac­tiv­ity in the dairy sec­tor, where in­ter­est in this size range has been strong for some time. The un­der-40hp range was down 10 per cent on last month – the first monthly fall we have seen for some time – but still up 12.5 per cent for the year.

It is in this seg­ment more gen­er­ally that a level of sat­u­ra­tion may fi­nally be oc­cur­ring. While the fun­da­men­tals un­der­pin­ning this mar­ket, known as the leisure mar­ket, are still strong, buy­ing ac­tiv­ity has been hec­tic for some time and some in the in­dus­try are sug­gest­ing that a tem­po­rary lull may be oc­cur­ring.

De­mand for trac­tors in the other two size ranges – 40-100hp and 200hp and above – was in line with Au­gust and 5-7 per cent up on last year.

Across the na­tion, Queens­land sales were once again strong, up 12 per cent on Au­gust and the same amount on last year. South Aus­tralia had a par­tic­u­larly strong month, climb­ing 30 per cent and now placed 10 per cent up on the same time last year.

NSW was steady, re­flect­ing the vari­able weather con­di­tions be­ing ex­pe­ri­enced there and, af­ter a slow start and some late rain, West­ern Aus­tralian sales bounced up slightly on the pre­vi­ous month.

There are now signs that com­bine har­vester sales have slowed con­sid­er­ably as a re­sult of the re­duced har­vest this year. Given that many har­vesters are or­dered around nine months in ad­vance, the sales fig­ures to date re­flect a very healthy po­si­tion – 20 per cent up on Au­gust and a whop­ping 30 per cent up on last year.

Un­der­min­ing this po­si­tion, though, is a lack of op­ti­mism for fur­ther ex-stock or­ders and a cloud over ex­pected for­ward or­ders that will need to be placed in the com­ing months. This will im­pact next year’s fig­ures con­sid­er­ably.

This, how­ever, au­gurs well for cashed-up buy­ers who are able to take ad­van­tage of the ready avail­abil­ity of stock.

Baler sales were broadly in line with Au­gust but still 15 per cent up on last year. Fi­nally, sales of out-front mow­ers, linked to the ‘leisure’ mar­ket, were well down in Septem­ber month but re­main in line with last year’s num­bers.

While we are see­ing a re­duc­tion in de­mand for agri­cul­tural equip­ment, this is off what was a record 2016 year with many feel­ing that we are at more man­age­able lev­els.

Fore­casts are for a con­tin­ued healthy de­mand for trac­tors while com­bine har­vester sales will be largely driven by the con­di­tions in the large crop-grow­ing states of WA and NSW.

Photo: Richard I’An­son/Lonely Planet Im­ages/Getty Im­ages

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

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