It would appear that the steam is beginning to run out for sales of agricultural equipment across Australia with sales steadying and sentiment beginning to soften.
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Photo: Richard I’Anson/Lonely Planet Images/Getty Images
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It is clear that the various well publicised weather events that have been occurring across the country are now having an impact as expectations for another record season have been well and truly dampened.
September saw tractor sales in line with August and 10 percent ahead on a year-to-date basis. This month was dominated by the 100-200hp category, which was up 17 percent and ahead 13 percent year-to-date.
This segment seems to be driven by activity in the dairy sector, where interest in this size range has been strong for some time.
The under-40hp range was down 10 percent on last month – the first monthly fall we have seen for some time – but still up 12.5 percent for the year.
It is in this segment more generally that a level of saturation may finally be occurring. While the fundamentals underpinning this market, known as the leisure market, are still strong, buying activity has been hectic for some time and some in the industry are suggesting that a temporary lull may be occurring
Demand for tractors in the other two size ranges – 40-100hp and 200hp and above – was in line with August and 5-7 percent up on last year.
Across the nation, Queensland sales were once again strong, 12 percent up on August and the same amount on last year. South Australia had a particularly strong month, climbing 30 percent and now placed 10 percent up on the same time last year.
NSW was steady, reflecting the variable weather conditions being experienced there and, after a slow start and some late rain, Western Australian sales bounced up slightly on the previous month.
There are now signs that combine harvester sales have slowed considerably as a result of the reduced harvest this year. Given that many harvesters are ordered around nine months in advance, the sales figures to date reflect a very healthy position – 20 percent up on August and a whopping 30 percent up on last year.
Undermining this position, though, is a lack of optimism for further ex-stock orders and a cloud over expected forward orders that will need to be placed in the coming months. This will impact next year’s figures considerably.
This, however, augers well for cashed-up buyers who are able to take advantage of the ready availability of stock.
Baler sales were broadly in line with August but still 15 percent up on last year. Finally, sales of out-front mowers, linked to the ‘leisure’ market, were well down in September month but remain in line with last year’s numbers.
While we are seeing a reduction in demand for agricultural equipment, this is off what was a record 2016 year with many feeling that we are at more manageable levels.
Forecasts are for a continued healthy demand for tractors while combine harvester sales will be largely driven by the conditions in the large crop-growing states of WA and NSW.
Gary Northover is executive director of the Tractor & Machinery Association of Australia (TMA). He can be contacted on (03) 9867 4289 or gary@tma.asn.au