Drought takes its toll on tractor sales

Following a stellar first half of 2018, agricultural machinery sales figures are starting to dip as effects of the drought kick in.

According to the Tractor and Machinery Association of Australia’s (TMA) latest farm machinery sales report, tractor sales in New South Wales in particular were greatly impacted, down 25 per cent in August and are now three per cent behind on a year-to-date basis.

The picture in Victoria was not much better, down four per cent for the month and now in line with last year’s figures.

In Queensland, the ‘damage’ was contained somewhat, only one per cent behind last month and now two per cent behind year-to-date.

However, it was a very different story in other parts of the country.

Sales in Western Australia were again strong, up 10 per cent on last month and sitting 10 per cent ahead year-to-date. Business is also booming in South Australia, with sales up 14 per cent for the month and now up 11 per cent for the year.

The Northern Territory reported a 60 per cent increase in tractor sales for the month while Tasmania also recorded a good month, with tractor sales up five per cent in August.

Across the four horsepower categories, sales in the compact under-40hp area slowed noticeably, 17.5 per cent behind last month and now five per cent behind year-to-date.

Conditions were similar in the 40 to 100hp range, with sales dipping eight per cent but marginally higher year-to-date.

The above 200hp category continues to slow, down eight per cent in August and now nine per cent behind year-to-date.

The only bright spot appears to be in the 100-200hp range, up four per cent for the month and sitting nine per cent ahead for the year.

According to TMA’s executive director, Gary Northover, this category appears to be doing all the heavy lifting in the tractor market at the moment.

“The commonly held view appears to be that we may have reached a bit of a saturation point when it comes to the large end of the range and the smaller tractors, long dominated by the leisure market, may also be experiencing a pause after running hot for so long,” Northover said.

Sales of combine harvesters have not been reported in great numbers yet as the window for deliveries begins this month.

“Most dealers are playing their cards close to their chest in terms of the success or otherwise of this season,” Northover said.

“The West is buoyant but there is a fair degree of pessimism in the Eastern States. The full picture will unfold in the coming weeks.”

Baler sales remain subdued, down another four per cent in August and now 16 per cent behind last year.

“Once again we are seeing a dampening of demand here in response to the broader market,” Northover said.

Finally, sales of out front mowers are down a further 16 per cent in the month, now six per cent behind for the year.

“Not surprisingly, the industries’ run of good fortune appears to be slowing for the first time in five years,” Northover said.

“Drought combined with a bag of economic forces including exchange rate, interest rates and improving overseas demand are all set to have an impact.”

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