In­dus­try view

Trac­tor sales slide fur­ther in Novem­ber as drought im­pact lingers

Farms & Farm Machinery - - Contents -

Na­tion­wide trac­tor sales in Novem­ber were down 15 per cent for the month, leav­ing the year to date (YTD) po­si­tion around at 2 per cent be­low where it was in 2017, as the im­pact of the drought con­tin­ues to take its toll.

By years’ end we broke a five-year cy­cle of con­tin­u­ously in­creas­ing trac­tor sales vol­umes and we ex­pect 2019 to be much the same.

While there are ar­eas of the mar­ket that re­main strong, we be­lieve that the im­pact of the drought will be felt for some time to come.

All four re­ported cat­e­gories ex­pe­ri­enced dips in Novem­ber, most no­tably in the smaller size ranges. Sales of trac­tors with less than 40 horse­power (29.8kW) were down 22 per cent for the month and 9 per cent be­hind the pre­vi­ous YTD. The 40hp–100hp (29.8kW–74.6kW) range was also down 22 per cent and 6 per cent be­hind YTD.

Larger trac­tors in the 100hp (74.6kW) to 200hp (149kW) range were be­hind 2 per cent for Novem­ber and re­main around 6 per cent ahead of last year, while trac­tors above 200hp were down 2 per cent and are 7 per cent be­hind on a full year ba­sis.

Sales ac­tiv­ity con­tin­ues to vary around the na­tion. Western Aus­tralia is hav­ing a bumper year, with sales up 8 per cent year to date fol­low­ing a 15 per cent in­crease in Novem­ber.

South Aus­tralia is hav­ing a topsy turvy-year, down 25 per cent for the month, but still 7 per cent ahead of last year; and the North­ern Ter­ri­tory and Tas­ma­nia have seen more trac­tors sold at this stage of the year than there were 12 months ago.

Not sur­pris­ingly, the drought-af­fected Eastern States recorded de­clin­ing sales fig­ures in Novem­ber. NSW was the hard­est hit, down 25 per cent for the month and 10 per cent for the full year, while Queens­land was down 17 per cent for the month, 5 per cent for the year, and Vic­to­ria was down 7.5 per cent for the month and now sit­ting 1.4 per cent be­hind an­nu­ally.

We have pre­vi­ously spo­ken of the in­flu­ences that im­pact a trac­tor sale, in par­tic­u­lar, the roles that im­proved tech­nol­ogy and lower in­ter­est rates have had.

Off­set­ting this to some de­gree is the re­newed fo­cus farm­ers ap­pear to be ap­ply­ing to ma­chine util­i­sa­tion, par­tic­u­larly at the high end. It is per­haps not sur­pris­ing that when con­di­tions tighten up a bit, fo­cus turns to cap­i­tal util­i­sa­tion and this is no dif­fer­ent with agri­cul­tural prod­uct.

We con­tinue to see farm ra­tio­nal­i­sa­tion oc­cur­ring and when neigh­bour­ing farms com­bine, there will al­ways be the po­ten­tial for greater shar­ing of as­sets.

This hasn’t been too much of a pri­or­ity over the last five years or so, but now ap­pears to be oc­cur­ring to a greater ex­tent, lead­ing to a less­en­ing of de­mand for new prod­uct.

Har­vester sales limped along in Novem­ber with deal­ers fo­cus­ing on do­ing deals that might see a ma­chine held for de­liv­ery next year in the ab­sence of new sales. On a YTD ba­sis we are now 23 per cent be­hind last year.

Bailer sales con­tinue to re­cover with a huge 53 per cent lift in Novem­ber, putting them 12 per cent ahead of last year. Clearly there has been a lot more hay cut this year in re­sponse to the pre­vail­ing con­di­tions.

Sales of out-front mow­ers have dipped again, down 16 per cent for the month and now 10 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 at [email protected]

Left: Trac­tor sales are down in the drought-af­fected Eastern States of Aus­tralia, drag­ging down the na­tional trend. Im­age cour­tesy Getty Im­ages.

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