Farm equipment sales take a hit

Demand for agricultural machinery dropped significantly In January due to natural disasters, TMA reported

Despite a surprise spike in sales at the end of last year, the tractor market has once again fallen behind with sales numbers now trailing last year’s by 16 per cent.

According to the Tractor and Machinery Association of Australia (TMA), dealers around the country were reporting a drop in demand due to the extreme weather events along with the prolonged bushfire season.

“Whilst it’s early days yet, the heavens have opened up and the bushfires have all but been extinguished and a fair degree of optimism has return to agriculture with some hope for farmers planting late summer crops particularly given the solid commodity prices still being achieved,” said TMA executive director, Gary Northover.

Across the country, most states reported a fall in sales compared to the same time last year, except for Victoria. NSW reported a 33 per cent slump, Queensland was down 27 per cent, South Australia was down 19 per cent and WA was in line with last year. Only Victoria recorded an increase of 2.5 per cent from last January’s numbers.

January sales were strongest in the 100 to 200hp category, up 2.6 per cent. The 200hp and above range was down 13 per cent, while the 40 to 100hp range dropped by 20 per cent. The under-40hp range also struggled, down 31 per cent.

The TMA said while the outlook seems positive thanks to the current rains, the organisation still expects tractor sales to be down this year with early predictions putting the total at around 10,000 units.

“The impact of the drought is likely to be felt for some time yet and 2020 is unlikely to be the year of full recovery,” Northover said.

“That said, very low interest rates combined with strong inventory levels means that buying opportunities for farmers should remain strong throughout.”

Combine harvester sales remained in the doldrums with only a small number of sales recorded in January. “Importantly, it is generally around this time of the year that forward orders are placed for deliveries later in the year and the outlook for these is presently mixed across the nation,” Northover said.

After a record breaking year, hay baler sales have started to slow down, with sales dropping 29 per cent. “However, the prevailing view is that demand will still be very strong and anything that can be cut, will be cut, so we are expecting another strong year for baler sales,” Northover said.

Lastly, out front mower sales also slumped in January, down 50 per cent for the month.

TMA has also announced the theme for its annual conference this year, to be held once again at the Hyatt Place Melbourne, Essendon Fields on July 21.

The theme this year will be “Towards 2030” and will focus on addressing future challenges in the ag industry such as autonomy, sales and marketing effectiveness and more.