Best year for tractor sales in 40 years

The year 2021 was a year the farming industry will never forget, with tractor sales hitting an all-time high of 17,090, according to agricultural market research company, Agriview.

The company, which compiles a State of the Industry report every year, said that was the highest number the industry has seen since farm machinery sales data were officially collected and analysed in its current form.

The last time sales numbers were that high was in 1981, when 15,700 tractors were sold.

Agriview added the real number of tractors sold in 2021 was arguably closer to 19,500, as a small number of companies do not contribute to the statistical sales service.

RELATED: Tractor sales top 18,000 units

And based on sales recorded to June 2022, this year is looking like another record-breaking year.

According to Agriview’s Alan Kirsten, who recently presented at the Tractor and Machinery Association of Australia’s (TMA) annual conference, tractor sales for June 2022 was the highest in 40 years, nearly hitting the 2500 mark and sitting just below 2650 sold in June 1981.

That brings the tractor sales numbers in the first half of 2022 to 9105.

By all accounts, 2022 will be the 12th year in a row that the tractor industry exceeds 10,000 units in sales, whereby 10,000 was agreed to by most in the industry as an indication of a good market.

In dollar value terms, the tractor industry turned over $2 billion dollars in 2021, up 41 per cent on the previous year. All broad power segments recorded strong gains but the over-200hp segment recorded the biggest gains, with its 67.5 per cent growth from last year fetching nearly $1 billion in sales for that segment alone.

It wasn’t just tractors selling like hotcakes in the past year. Following several years of sluggish sales due to drought, combine harvester sales are bouncing right back, recording over 1000 in sales (1081 in 2021, to be exact), which represented a whopping 61 per cent growth from the previous year.

The value of combine harvester and header sales increased by 59 per cent with $917.4 million worth of new machines sold. Agriview said the improvement in demand was helped by a great season across much of Australia as well as strong commodity prices.

In contrast, sales of hay tools including balers, mowers and windrowers dropped significantly from the record highs set in the last few years.

Following a record-breaking 396 balers sold in 2020, the baler market retreated strongly in 2021, falling 52 per cent with 191 units sold. This marks the first time baler sales have dipped under 200 in a few years.

Agriview said a significant reduction in demand from both oaten hay and broadacre producers was the main reason for the drop in hay tool sales.

“The strong numbers in the previous year was a product of a strong export oaten hay market, and producers were buying and upgrading machinery,” Kirsten said.

Drought conditions prior to the pandemic also led to baler sales spiking as broadcare farmers were investing in balers to bale failed crop to sell.

“So it was worthwhile that farmers invested in another tool on farm to mitigate what happened with the crop or lack thereof,” Kirsten said.

Sales of balers, hay tools and windrowers totalled $241.7 million in 2021, which was 29 per cent down on the $341 million sold in 2020.

Self-propelled sprayers and tillage and seeding machinery had a great year in 2021.

Sales of self-propelled sprayers last year were estimated to have reached $600 million, a rise of 33 per cent on the $450 million sold in 2020.

Tillage and seeding equipment also improved on 2020’s results, recording around $400 million in sales in 2021 compared to $285 million estimated to have been sold in the previous year.

Another point of interest brought up by Kirsten at the conference was the amount of franchise dealership businesses that have increased since Agriview started to collect data on distribution channels in 2009.

Back in 2009, there were 300 group business outlets but that has increased to 394 in 2022 so far, representing a 31.3 per cent rise.

In contrast, single business outlets decreased from 457 outlets in 2009 to 269 in 2022, representing a 41.1 per cent drop as single businesses continue to close up shop or be acquired by the bigger group dealerships.

In total, there are 663 business outlets in 2022, a far cry from the 2500 outlets in 1981, Agriview said. When considering the amount of tractors sold in 1981 versus now, on average, outlets back in 1981 sold an average of 6.3 tractors whereas outlets today are selling an average of 25.8 tractors per outlet.

“Considering the amount of machinery sales achieved in the last year and the amount of outlets now, it’s remarkable that we were able to pump out so much product,” Kirsten said.

Another interesting fact Agriview pointed out in its report is that back in 1981, there were 35 tractor brands on offer with 271 models available, compared to 21 brands and at least 655 different models on offer today.

While Kirsten applauds the industry for being able to handle the stress of doing more with less, ie selling way more machinery with a much smaller distribution channel compared to 1981, he said more needs to be done to reel in new talent.

“We've got so many different machine models and specifications now that we didn't have back in 1981, but we don’t have enough people to look after the products,” he said.

It isn’t just farmers that the sector needs more of, but also mechanics, parts interpreters and service technicians, Kirsten said.

“The industry has to come together to try and attract more people into the industry to look after all these products moving forward,” he said.

“It's a great industry. I've been in it for 40 years and have traveled and met a lot of great people along the way.

“We just need to do everything we can to make people aware of just how great a place to work it is.”

It was a bittersweet moment for Kirsten as his appearance at this year’s TMA conference was also his last, as he announced the acquisition of his company, Agriview, by global agriculture market research company, Kynetec.

Following the acquisition, Kynetec and the TMA have entered into a 5-year agreement to provide Kynetec with the sales data which the company will audit, aggregate and process through Agriview’s proprietary software to provide monthly market data and analysis to the machinery sector.

Kirsten will continue with Kynetec on a part-time consultancy basis for the foreseeable future, while all other former employees of Agriview will transition to Kynetec.

Representatives from Kynetec were also present at the TMA conference to introduce the business to the delegates.

The 2022 TMA conference was held on July 20 at the Hyatt Place Essendon in Melbourne, officially making its return this year after a two-year hiatus due to the COVID-19 pandemic.