drought down­turn

Sales of trac­tors and com­bine har­vesters fell in Sep­tem­ber as the im­pacts of drought were felt at the deal­er­ships

Farms & Farm Machinery - - Market Trends -

Trac­tor sales fell by “their great­est amount in re­cent mem­ory” in Sep­tem­ber as the im­pacts of drought were felt, though many in the in­dus­try be­lieve the dip will re­solve when rains ar­rive. Sep­tem­ber sales data re­leased by the Trac­tor & Ma­chin­ery As­so­ci­a­tion of Aus­tralia (TMA) showed trac­tor sales were down 18 per cent across the board af­ter a year of strong sales – de­fy­ing wider ex­pec­ta­tions. “Trac­tor sales have sur­passed the 12,000 unit mark in each of the past few years and it now ap­pears highly un­likely that that num­ber will be reached in 2018,” the As­so­ci­a­tion says, adding that many deal­ers be­lieved con­fi­dence should be re­stored when and if it rains.

“We ex­pect, how­ever, that the com­bi­na­tion of ex­change rate de­clines, in­ter­est rate in­creases and pos­si­ble trade war back­lash will see ac­tiv­ity oper­at­ing at a re­duced level for some time,” the As­so­ci­a­tion says.

The dip comes af­ter a pos­i­tive start to the 2018–19 fi­nan­cial year. Sales in the un­der-40 horse­power seg­ment were lead­ing the pack in July, up 12 per cent, with Vic­to­ria in par­tic­u­lar see­ing very strong ac­tiv­ity.

How­ever, all four re­ported size ranges of trac­tors ex­pe­ri­enced a dou­ble digit dip in Sep­tem­ber, with sales of trac­tors un­der 40hp down 23 per cent month on month and cur­rently 7 per cent be­hind where they were in 2017.

Sales of the 40hp–100hp range are down 18 per cent and are now in line with last year, while sales of the 100hp–200hp range fell 14 per cent – but re­main 7 per cent higher than last year in a rare bright spot for the sec­tor.

Sales of trac­tors above 200hp are down 22 per cent on last month and now sit 10 per cent be­hind on a year to date ba­sis.

On a state-by-state ba­sis, South Aus­tralia was the only state to ex­pe­ri­ence growth, with trac­tor de­liv­er­ies up 20 per cent in Sep­tem­ber, com­pared to Au­gust, and be­ing 12 per cent higher on a year to date ba­sis.

But sales along the eastern seaboard were se­verely hit, with

NSW drop­ping an­other 36 per cent, now down 7 per cent for the year. Queens­land sales were down 22 per cent, 4 per cent be­hind year to date.

Vic­to­rian sales held ground, in line with the month and pre­vi­ous year – with the dairy sec­tor off­set­ting some of the stress be­ing felt in the west of the state. Sales in the North­ern Ter­ri­tory and Tas­ma­nia were also broadly un­changed.

Deal­ers de­scribed the dip as a pause rather than any real weak­ness in the mar­ket, not­ing it was a rar­ity in what has been a typ­i­cally strong year for the state.

It is not only trac­tor sales that were af­fected by the drought, with na­tion­wide de­liv­er­ies of com­bine har­vesters in Sep­tem­ber 2018 be­ing al­most half of what they were at the same time last year.

“Sep­tem­ber is the first sig­nif­i­cant month for com­bine har­vesters de­liv­er­ies and the much-an­tic­i­pated weak­ness was seen in Sep­tem­ber’s num­bers, with a to­tal of 163 units de­liv­ered com­pared to in ex­cess of 300 units for the same month last year,” TMA says.

“It is ex­pected that this trend will con­tinue for the bal­ance of the year, lead­ing to a sharp rise in high priced in­ven­tory be­ing held across the coun­try.”

Other items of farm ma­chin­ery were also strug­gling as hay pro­duc­tion re­mains stressed across the na­tion.

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