Appetite for farm machinery skyrockets in 2020

It seems not even a global pandemic could get in the way of Aussie farmers’ desire to spend big, with Commonwealth Bank’s Regional and Agribusiness division reporting a 50 per cent increase in financing for agri machinery this year compared to previous drought-stricken years.

New South Wales, which was hit particularly hard by drought and bushfires in recent times led the growth, with lending up more than 100 per cent in the state compared to the same time last year, the bank added.

“For many of Australia’s farmers, this year has been a rebound from drought with favourable growing conditions, a successful winter crop in many regions and strong optimism about yields and quality of harvest,” said Commonwealth Bank Executive General Manager Regional and Agribusiness, Grant Cairns.

“Over the past few months we’ve seen financing in the sector increase dramatically – largely driven by farmers purchasing agricultural machinery for this year’s crop season.

“We’ve seen asset finance for ag machinery, particularly tractors and harvesters, increase significantly. Across the country, new asset financing for tractors is up 119 per cent – the highest volumes we've seen in the past three years, and financing for harvesters is up 108 per cent.”

Cairns said the Government’s expansion of the instant asset finance write off scheme is providing further incentive for farming businesses looking to take advantage of the positive outlook and expand for the future.

“Agriculture confidence is at an all-time high for a number of reasons – nationally, farm values are up,  commodity prices are holding firm, interest rates are at record lows, seasonal conditions have been good, there is strong consumer and retail demand for fresh produce, and there’s Government incentives like the instant asset write off scheme.

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“The trends we’ve been seeing signals a higher confidence across the farming sector, and that’s good for everyone – for the regional towns where the farms are located, for the whole supply chains that support our food and fibre, for the markets they sell to, and for all of us who enjoy fresh Australian produce.”

One business that has seen a noticeable difference is Griffith-based farm equipment supplier, Codemo Machinery Services. 

 “We’ve seen a really big change in NSW over the past 12 months - obviously the weather and improved seasonal conditions is a big part of this,” said Codemo Machinery Services director, Simon Codemo.

“This weather, combined with low rates, stable commodity prices and the instant asset write off scheme has boosted farmer confidence.

“I’ve definitely seen a boom in sales because of this confidence – we’ve seen demand for both new and used equipment increase across the board.

“For the first time in many years, our customers are harvesting above average yields - many of our customers are in the process of harvesting their crops right now and yields are looking really good."

The Tractor and Machinery Association of Australia’s (TMA) monthly tractor sales reports have reflected this increased appetite to invest, with the organisation predicting that tractor sales this year will reach levels not seen in decades.

However, with the sudden surge in demand comes the struggle to keep up, with dealerships across the country reporting low stock levels and issues with receiving deliveries on time due to COVID-19 implications on freight and manufacturing levels overseas.