Positive outlook for machinery sales

The Tractor and Machinery Association of Australia’s (TMA) latest sales report shows tractor and agricultural machinery sales in Australia have picked up further in March to sit five per cent above March 2019 figures in terms of unit numbers, though down 10.8 per cent in dollar terms.

March 2020 figures are now sitting 3.2 per cent behind year-to-date.

“The prospects for machinery sales in the agricultural sector have improved considerably in recent weeks despite the current troubles associated with the COVID-19 virus,” said TMA executive director, Gary Northover.

“First and foremost, we have seen considerable rainfall in most parts of drought affected Australia which has led to a renewed optimism from farmers knowing that they can now get crops planted with a fair degree of certainty that they will yield results,” he said.

“The broadacre market has a long way to go before we see large tractor and harvester sales return to recent highs, the rest of the market however is bouncing back.”

Northover added the new Instant Asset Write Off threshold of $150,000, introduced by the Federal Government as part of its economic rescue packages to stimulate spending, is a major boost to the industry and has been a driver for activity.

With agriculture listed as ‘essential’, TMA has been working with both State and Federal Governments to ensure that suppliers of machinery, parts and service can continue operating.

“I am pleased to say that we have received advice from the Federal Agriculture Minister that this is the case which will prove to be a great encouragement to our industry to continue supporting agriculture in this country,” Northover said.

Across the horsepower segments, unit sales were strongest in the under 40hp range, up 29 per cent for the month off the back of the new instant asset write off. The 40 to 100hp range was in line with last March while the 100 to 200hp category had another strong month, up another 16 per cent.

The 200hp and above range did not perform as well as the other segments, down 21 per cent for the month and now 15 per cent behind year-to-date.

Around the states, Victoria continues to enjoy a bumper year, up another 32 per cent on the same month last year, now 15 per cent ahead for 2020.  Activity in the Northern states remains mixed with NSW up 13 per cent for the month but six per cent down year-to-date; and Queensland down another nine per cent for the month and now 15 per cent behind last year.

The story in the West was somewhat grim with Western Australia 30 per cent down for the month, 17 per cent down YTD. South Australia recorded its first rise for some time - up 27 per cent for the month and three per cent ahead of last year.  Finally, the strong run in Tasmania slowed in March to sit 19 per cent behind for the month but four per cent ahead for 2020.

Combine harvester sales continue to struggle with only a small number of sales completing again in March with no great prospects for the year ahead despite the improving conditions, TMA said.

Baler sales have started to take off again in March with a 51 per cent rise on last year, while out front mowers are 18 per cent behind the same time last year.

TMA has also announced the cancellation of its annual conference this year that was due to be held on July 21, 2020.

“At this stage it will not be held again until 2021, in the meantime...stay safe!” Northover said.