Hay equipment and midsize tractor sales surge

By: Anna Game-Lopata

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Demand for balers, mowers, rakes and tedders is up again after several years in the doldrums, while tractor sales decline slightly

Hay equipment and midsize tractor sales surge
Industry analyst Agriview's report shows hay equipment sales is on the rise while small and large tractor sales is slowing down.

Figures released this week show farmers are buying up big on hay equipment, combine harvesters and mid-sized tractors in the lead up to harvest, while sales of small and large horsepower tractors continue to decline.

Industry analyst Agriview reports 243 balers been sold until the end of September.

The peak industry research body says this figure is a couple of units short on last year, but suppliers and the machinery finance sector confirm enquiries and sales remain robust as harvest approaches.

Combine harvesters are also holding up with over 1000 delivered in 2011 and 2012.

Despite predictions of a fall to about 750 this year, September figures show just a 7 percent decline with sales prospects expected to improve.

Agriview Analyst Alan Kirsten says the industry should expect a big fourth quarter.

"We have to remember that the first quarter of this year was well down across the board due to the prolonged dry summer," Kirsten says.

"September figures, which are very close to last year’s actually represent a big upturn."

Machinery finance provider De Lage Landen adds September was a record month with applications up 25 percent on last year.

National Sales Manager Greg Crawford says October is trending the same way with strong quoting activity.

"There’s definitely more confidence out there," Crawford says.

"Farmers are looking forward to a good harvest, except for those in northern New South Wales and Queensland. It's still dry up there and the outlook isn't so good."

According to Tractor & Machinery Association Executive Director Richard Lewis the spike in demand for hay equipment is good news given the market had been falling in the order of 15-20 percent each year since 2008.

"The acute shortage of hay fodder around the country we’ve seen has started to turn around, with a  relatively wet winter in the high hay areas of Victoria, South Australia and NSW amounting to a good growing season," Lewis says.

"The gear that’s out there now is relatively old so growers are buying new balers or mowers pretty rapidly. [The earlier decline] has just been some pent up demand."

From a suppliers’ perspective, Lewis says a substantial amount of stock has been kept on the ground for a year or two, so dealers are keen to get it out the door.

"This means the pricing of equipment is pretty spectacular.  Cheap finance and discounted hay equipment is the order of the day, so it’s a good time to buy," he says.

 "This year all that old stock will clear out, suppliers will offer growers incentives to order early next year and the process will start again. There’s every reason to think that next year will be strong [for hay equipment] as well."

Meanwhile, tractor sales also picked up after a quiet start to the year.

Sales for the first quarter had been 14 percent down on 2012 but by the end of September were only 6 percent behind.

Total sales for the nine months sit at 7769 compared with 8289 in 2012.

Lewis says the downturn on tractor sales should be understood within the context of a market inflated by government incentives to buy.

"The last couple of years have been record years for tractor sales so were coming back to a more ‘average’ level," he says.

Lower and higher horsepower tractors are down but the middle, 100 to 200 horsepower range is up 2 percent at 1362 against 1338 last year.

The industry says it's the first time the market has seen any joy in this sector for some time.

Previously, it was losing out to the 200 horsepower category as farmers upgraded to bigger gear.

Lewis says the spike can be attributed to improvement in the hay and fodder market along with the recent increase dairy pricing bringing about more prosperity in the sector. 

"The first six months was quiet for [mid-range tractor sales], but we always knew there was a bit of growth potential in the market place on the back of an uplift in dairy prices," Lewis says.

He  adds the flip side of a strong Australian dollar for farmers in the market for new machinery is the competitive prices currently on offer.

"No doubt the strength of the dollar is causing pain for farmers who are exporters, but the fact is we import every tractor in the market and have done for the last 30 years," Lewis says.

"The high dollar keeps the price low for imported machinery and tractors haven’t been this cheap in a long, long time."

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