Year ahead looks bright for tractor sales

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Following on from what was an outstanding 2016, sales of agricultural tractors experienced a considerable bump in January, although much of this has been put down to an overhang from the pre-Christmas period, writes TMA executive director Gary Northover.

The smaller under-40hp ‘Leisure’ category dominated the month, up 52 per cent on the corresponding month last year.  Much of this activity occurred in the southern states, with Queensland and Western Australia reporting quiet months.

There was solid movement in the 40-100hp range, up 28 per cent while the larger 100-200hp and above-200hp categories were quiet.

Not surprisingly, sales of harvesters were slow, with a small number of baler sales also reported.

The sale of out-front mowers continues to roar, up another 15 per cent on the same time last year due to the large amount of grass around. This is also having an effect on the smaller tractor sales market as customers move to renew their stock in this area.

Looking ahead, expectations are once again high for another strong year in the agricultural equipment market.

Manufacturers and importers continue to see the Australian market as one of the few bright spots on a global basis and, as a result, are dedicating significant effort to success in this region. This is being played out in the forward order programs being offered in today’s market.

Low (often 0 per cent) interest rate deals are predominant in the smaller-size segments. Initiatives including pre-season service programs are being offered in the larger end.

This is, in turn, leading to very strong projections occurring at dealerships across the nation. Indeed, many dealers are reporting that demand is a strong as ever and forecasts are being increased as a result.

Dealers are reporting continued strength in the beef, sheep and vegetable segments, along with a return of interest from the dairy sector.

Investment in land and infrastructure is continuing at a great pace and acting as a significant enabler to confidence levels, in turn leading to a willingness in the market to purchase.

We are seeing a continuation of a more sophisticated approach to the use of agricultural equipment by farmers and contractors as they continue to adopt a greater fleet management focus.

Because farmers are so much more focussed on productivity and are constantly seeking to avoid downtime, the importance of locking in known hourly operating costs is critical.

This is seeing more users trading machines out at around the 3500-4000-hour mark prior to any major repairs or refurbishment requirements in much the same way as fleet operators do in other industries.

These low-houred machines are then easily traded, ensuring a healthy cycle exists. As we reported last month, stocks of used equipment remain low and dealers remain ready to deal.

With an encouraging weather outlook on the horizon, continued low interest rates and a reasonably stable Australian dollar, there is every reason to believe that 2017 could be another record year.

GARY NORTHOVER is executive director of the Tractor & Machinery Association of Australia (TMA). He can be contacted on (03) 9867 4289 or via email 

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