Last year was the best for tractor sales since 1987, with sales totalling just shy of $1.1 billion, according to the Tractor & Machinery Association Australia (TMA) State of the Industry Tractors & Equipment Report 2015.
Low interest rates and high productivity in certain farming sectors is contributing to the increase, as discussed at the TMA’s annual conference in Melbourne yesterday.
The fastest-growing farm machinery sectors are hay tools and out-front mowers, with sales up 12 per cent and 21 per cent compared to 2014 respectively.
TMA executive director Richard Lewis says good rainfall, solid commodity prices in certain farming sectors and low interest rates are providing favourable market conditions for farm machinery dealers.
“We continue to be blessed with very stable market conditions,” Lewis says.
“The exchange rate continues to trend downwards, interest rates continue to remain at historical levels and inflation is in check, so it couldn’t be a better time to invest — and I think that is exactly what’s happening.”
However, he says he is concerned that these low interest rates may be pulling more sales forward than we think.
“Lower repayment costs due to lower interest rates may be over-stimulating the market and, if it is, there may be some point when this stops and that is a shock that we don’t want,” Lewis says.
“There is nothing to suggest interest rates will move up any time soon, but the minute they do, industry should take note as this may be an indicator that this period of unprecedented growth may be coming to an end.”
The best-performing state for tractor sales in calendar year 2015 was New South Wales, which increased by 17.4 per cent, followed by Queensland (up 17.1 per cent).
Victoria saw sales increase by 5 per cent, South Australia by 14.6 per cent and Tasmania by 5 per cent. Northern Australia was fairly equal.
Western Australia was the only state that had a decrease in tractor sales, to the tune of 6 per cent.
Most Australian farmers bought 0 to 60hp tractors, with 4,500 tractors sold compared to 4,000 in 2014.
The 60 to 100hp market increased by 4.7 per cent, and sales of 100 to 200hp tractors was up 18.7 per cent. Demand for tractors in the 200hp-plus segment decreased by 1 per cent.
If you’re looking for used farm machinery for sale, check out our listings.