Demand for agricultural machinery is high and is likely to stay that way amid emerging supply challenges, Tractor & Machinery Association of Australia executive director Gary Northover says.
January has seen a continuation of the sales momentum that saw 2020 deliver the strongest year in tractors sales since the 1980’s.
What has caused surprise is the strong level of demand across the board with expectations that this will continue through the year.
Supply challenges that were first seen in the middle of last year continue and we expect this to be the case for much of the year.
Suppliers are beginning to report some cost increases with shipping etc. and these are likely to see modest machine price rises as a result.
January sales were up 60 per cent on the same month last year and it’s a reminder of how quickly the industry recovered from that period 12 months ago.
Check out last month’s sales data here
As we have reported previously, the country was still in the state of severe drought, bushfires were raging along the east coast and this strange phenomenon known as COVID-19 first emerged.
Activity in the month was strong in all states with NSW again the standout, up 111 per cent on the same time last year. Victoria reported a solid lift up 30 per cent; meanwhile Queensland was up 63 per cent.
Western Australian sales picked up 47 per cent in December, sales in South Australia were solid, 24 per cent up and finally Tasmania finished the month 68 per cent ahead.
The increase in sales numbers is spread evenly across the four reporting categories, supported by the Instant Asset Write Off scheme. The under 40hp (30kw) range was up 81 per cent for the month. The 40 to 100hp (30-75kw) range was again up strongly 56 per cent in the month, the 100 to 200hp (75-150kw) category was up 42 per cent.
The large 200 hp (150kw) Plus range enjoyed its first rise for some time, up 73 per cent on January last year. It is this range that appears to be the hardest hit by supply constraints with reports of long lead times common.
For products under 200 hp we are seeing lead times on factory orders being extended by around 6 – 8 weeks however this can be 2 to 3 times greater than this for the larger machines.
Sales of Combine Harvesters are expected to be similarly affected during the year with the usual order intake season taking on greater importance.
Baler sales were in line with the same month last year and are expected to remain strong in 2021 and sales of Out-Front Mowers are still flying, up 124 per cent ahead of the same time last year.
As we look forward to 2021, most suppliers are predicting a continuation of the strong levels of demand underpinned by both the ongoing favourable weather conditions and the Instant Asset Write Off Scheme.
We do however expect to see some unevenness in supply as the main manufacturing centres in North America and Europe continue to struggle with the impacts of the Coronavirus. This may lead to some “lumpiness” in sales reporting however, we expect this year to be another strong one.
Finally, the TMA’s Annual Conference is planned to be held once again this year in Melbourne during July.
Full event details will be published shortly and we hope that people will take the opportunity to come together again after what feels like a very long break.