October machine sales have steadied after September’s dip
Following a dramatic downturn in September where sales of tractors dropped markedly, October has seen a steadying of the ship with a slight recovery in machine sales occurring.
This was partly due to some ‘end of year financial planning’ from some manufacturers which may have overinflated the position a little.
Overall, tractor sales were down around 2.5 per cent compared to last October and are now broadly in line with last year on a year to date (YTD) basis.
Queensland and WA recorded slight improvements, up around 1 per cent each for the month – with WA up a healthy 8 per cent on last year, and Queensland still trailing, down 3.5 per cent YTD.
Victorian sales continue to track last year while Tasmania (up 8 per cent), South Australia (up 10 per cent) and Northern Territory (up 8 per cent) are recording bumper years.
The most drought affected regions of NSW continue to be hard hit, with sales this month down another 13 per cent, which puts the state’s sales at 8 per cent behind where they were last year.
Of the tractor types, large tractor sales were the order of the day for October, with sales up 14 per cent for the month in the 100–200 hp (74.6–149kW) category – putting sales at 8 per cent ahead of last year.
This segment, normally associated with row cropping, has been strong for some time now and reflects the healthy state of our vegetable, horticulture and viticulture segments nationwide.
Sales of tractors over 200hp were 26 per cent month on month, partially impacted by the aforementioned end of financial year activity, and have made up ground to now be only 7 per cent behind YTD.
We are beginning to see signs of abatement in demand for large tractors, generally used in broadacre farming, due to consolidation in large broadacre operations and to changing climatic conditions.
Ultimately, owners of tractors in this size range demand an adequate return on their investment and we expect to see greater emphasis on machine utilisation before the next buying cycle resumes.
Activity in the small size ranges has been reasonably hard hit, with the under 40hp (29.8kW) segment in particular down 10 per cent for the month and 7 per cent YTD.
We believe the market is now applying a degree of caution in light of the pending election cycle and share market volatility, as the “leisure market” for tractors often tracks domestic economic sentiment.
There were 233 combine harvesters delivered in October, which was down on last year’s level. The expectation is that this will be about as good as it gets for harvesters this year as suppliers begin to look towards sales programs for 2019.
Bailer sales have made a recovery off what was a cyclical low and are now 13 per cent up on last year and once again Out Front Mowers were slow, down 27 per cent for the month and now 14 per cent behind last year.
Gary Northover is executive director of the Tractor & Machinery Association of Australia (TMA). He can be contacted on (03) 9867 4289 or [email protected]
Left: Sales of tractors of between 100–200hp (74.6–149kW) are 8 per cent higher than they were last year