After an amazing year for new sales in 2015, the question is, can we maintain those volumes for 2016? TMA's Richard Lewis says yes.
There’s no doubt the demand for technology and low interest rates has driven sales along nicely, while relatively small price increases in the face of the falling dollar have all contributed to sales demand.
However, as many will have read, the factories of the big multinational brands have been hit hard by downturns in North America and Europe, and we think stock will be in short supply by the middle of the year.
Factories cannot turn the supply tap on and off very quickly as they are reliant on many smaller suppliers for components.
They are also labour intensive, so an increase in demand from Australia, which only accounts for around four per cent of the world market, is not going to drive a ramp up at the factories. All of this makes inventory scarce.
The TMA, along with its partners at Agriview, have a view that this year will see a flat result in sales volumes for new tractors, a 10 per cent increase in volumes for combine harvesters, and a modest increase in balers and hay tools.
Some Victorians will feel this is highly unlikely given the dry across our state at present, however the long term outlook for agriculture is very strong and states which have had some good summer soakings will do very well into the early months of 2016.
Used inventory will benefit from the shortages experienced in the new sales, which is excellent news for dealerships holding over harvesting equipment from last season.
There will be a couple of other things to watch out for in 2016 as it relates to farm machinery.
We are expecting some changes in the national road usage rules for farm machinery as Ausroads conduct a comprehensive review of the use of farm machinery on Australian roads.
There will be some Australian product launches of both local and imported products, and judging from some of the stories out of Agritechnica late last year, some very impressive releases to keep an eye out for.
As always, we will be pushing the regulators to make life easier for users of farm machinery, whether it is on road or off, around licensing and ticketing for operators, etc., and we will stay close to the farmer groups within each state to ensure we are all engaged.
All in all, our suppliers and dealers of agricultural machinery should enjoy a decent 2016. However, as always in this great industry, everything can be influenced by circumstances and elements over which we have no control, especially the weather.
We look forward to hearing good news stories about the latest developments in farm machinery and how they are increasing productivity, reducing time in the field and, most importantly, keeping our owners and operators safer in 2016.
*Richard Lewis is executive director of the Tractor and Machinery Association of Australia (TMA). He can be contacted via email at richard@tracfin.com.au.