January 2020 ag machinery sales down: TMA

By: Gary Northover

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Drought and fires lead to lower sales of agricultural machinery in January, according to the Tractor & Machinery Association.

January 2020 ag machinery sales down: TMA
The TMA expects the impact of the drought to be felt on tractor sales for quite some time. Image courtesy Alamy.

 

Following on from December’s end-of-year rush where we saw a 7.5 per cent lift, tractor sales have, not surprisingly, been well down for January - behind 16 per cent on the same month last year.

Dealers have generally reported that, the impact of the extreme weather events along with the prolonged bushfire season have considerably impacted what demand there was in the market.

Whilst it’s early days yet, the heavens have opened up and at the time of writing, 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.


Check out what the TMA had to say about 2020, and the rate of machinery sales in December 2019, here 


The story in January however was nothing short of dismal in NSW, down 33 per cent on last January and Queensland which was down 27 per cent.

The story in South Australia was not much better, off 19 per cent for the month whilst Victoria was the one bright spot, up 2.5 per cent for the month. Western Australia was in line with last year.

January sales were strongest in the 100 to 200hp (75-150kw) category, up 2.6  per cent.

The 200hp (150kw) and above range was down 13 per cent for the month, the 40 to 100hp (30-75kw) range was also down 20 per cent and the under 40hp (30kw) range again struggled, down 31 per cent.

Despite the positive outlook provided by the current rains, we still expect 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. That said, very low interest rates combined with strong inventory levels means that buying opportunities for farmers should remain strong throughout.

Conditions for combine harvester sales continue to be very challenging with only a small number of sales completing 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.

Hay baler sales have taken a bit of a breather in January, down 29  per cent on last year’s bumper result 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.

Lastly, out front mower sales were well down in January, off 50 per cent for the month.

Lastly, the date for the 2020 TMA Conference has been set at Tuesday July 21st to be held once again at the Hyatt Place Melbourne, Essendon Fields.

This year’s event will be themed "Towards 2030" and will be focussed on the challenges expected in areas such as autonomy, sales and marketing effectiveness and many more as we launch into a new decade.

Full program details will be shared early in the new year, another not to be missed event.

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