Ag machinery sales hit record levels

The agricultural machinery market experienced one of its best years yet in 2016, with machinery sales reaching levels not seen in decades, according to the annual State of the Industry report.

The publication, prepared by market research company Agriview, revealed the combined sales of major machinery lines, which includes tractors, harvesters, balers, hay tools, self-propelled sprayers and windrowers, have jumped 16.5 per cent from 2015 to reach $A2.18 billion last year.

Tractor sales increased by 8.7 per cent to $1.2 billion in 2016, and are up 18 per cent on the average value of sales recorded between 2011 and 2015.

A trend towards bigger and more powerful workhorses is evident, with sales of tractors above 140hp recording increases of up to 25 per cent year-on-year.

Positive results can also be seen right across the board. Combine harvester sales totalled $510.4 million- a 23 per cent increase from 2015. Hay and forage equipment sales jumped 19 per cent year on year to $170.2 million, while hay tools sales recorded a 17 per cent increase to reach $67.4 million.

According to Agriview director Alan Kirsten, a number of factors such as a bumper harvest and increasing overseas demand for local produce are driving this growth.

"From a rural perspective, we are seeing record levels of farm production and exports which is being fuelled by increasing demand for our produce from international markets particularly to our north, China, ASEAN and other Asian countries," he says.

"It is clear that Australia's farmers are investing to meet the growing demand."

Kirsten adds the cost to upgrade to new machinery has never been more affordable, hence the increased investment across all sectors.

"It's never been cheaper to upgrade particularly as repayments often work out cheaper than what you were paying for that four or five year old machine and that means buyers are preserving cash," he says.

"Why else has the dairy sector been investing given the poor state the sector has been in for some time? Like any business they live and die on cash flow, so if they can upgrade and preserve their cash at the same time, why wouldn't they."

However, dealers and manufacturers should expect a drop in figures in 2017, given the stellar year the market has had in the past year, Kirsten adds.

The report was released at the recent Tractor and Machinery Association conference, where the theme was "The Future is Here- Advocacy, Distribution and Youth 2020."

Several subjects that were raised at the conference include jobs and recruitment in the agriculture industry; innovation in agriculture; and the current state of distribution channels in Australia.