As demand soars, supply of new tractors is starting to stumble as the impacts of COVID-19 continue to be felt globally – with delays of up to 16 weeks being felt.
October has produced another standout month for tractor sales and continues the very strong trend of 2020, according to the latest data from the Tractor and Machinery Association.
Sales in the month were up 25 per cent on the same month last year and are now up 22 per cent year to date. This outstanding result sees the full year on track to exceed the 13,000-unit mark for the first time since the 1980s.
Check out the sales data from September here
While there remains considerable buoyancy in the market off the back of the Instant Asset Write off program and a very strong year for agricultural product, as previously advised, we are beginning to see the impacts of the COVID-19 pandemic on factories and shipping across the globe; and this is now impacting supply.
Most dealers are not yet reporting lost business, but many are compelled to offer an alternative to buyers in order to keep sales.
This situation is likely to continue for the foreseeable future as, not only is factory output down due to social distancing requirements, the number of cargo ships in operation is also down, further exacerbating the problem.
We estimate that this has added around 12 -16 weeks to most deliveries.
In addition, the supply of parts remains challenging and suppliers are being hit with additional freight charges to get parts into their systems.
Returning to the October result, activity across the states was again strong with NSW the standout – up a whopping 70 per cent on the same time last year and now sitting 34 per cent ahead for the year.
Victoria reported a steady month and remains 24 per cent ahead year to date; meanwhile Queensland was up 12 per cent to be 13 per cent up for the year.
Western Australia sales picked up 5 per cent on the year to date, but remain 3 per cent behind last year.
Sales in South Australia continue to fly now 36 per cent up YTD, activity in Tasmania remains strong, now 28 per cent ahead for the year.
The increase in sales numbers is again due almost entirely to the ongoing strength in the smaller end of the market supported by the Instant Asset Write off scheme. The under 40hp (30kw) range was up 33 per cent for the month and now sits 29 per cent ahead for the year to date.
The 40 to 100hp (30-75kw) range was again up strongly 41 per cent now 24 per cent ahead for the year.
The 100 to 200hp (75-150kw) category was up 12 per cent and still up 28 per cent for the YTD whilst sales in the large 200 hp (150kw) plus range were steady, leaving this category 8 per cent behind YTD.
With regards to other products, sales of Combine Harvesters are beginning to improve again. The full year picture is likely to be around 15-20 per cent up on last year and whilst not nearing record numbers of 800+ units, a figure of 650 -700 is likely.
Baler sales continue their boom, up 21 per cent for the month, remaining up 31 per cent year to date; whilst sales of Out – Front Mowers were strong and still 21 per cent ahead of the same time last year.
So, while there are positives in the current La Niña weather pattern being experienced across much of Australia, combined with historically low interest rates;, the picture for supply is challenging and is expected to remain so for some time to come.