Rising interest rates, processing delays cause tractor sales fall

The Tractor and Machinery Association of Australia (TMA) has just delivered its latest ag market figures, showing tractor sales in February 2023 were down 29 per cent on the same month last year and are now down 27 per cent for the year to date, signaling a slow-down after several record-breaking years.

While TMA blamed the holiday season for January’s sluggish figures, stats and data in February were more concerning as it involved issues with biosecurity and processing delays at the port that don’t seem to be going away anytime soon.

In February, all states except for the Northern Territory experienced a decline in sales for the second consecutive month. Queensland was down 21 per cent, NSW down 38 per cent and Victoria recorded a drop of 27 per cent. Sales in Western Australia were down 18 per cent, South Australia recorded a 36 per cent decline and Tasmania was down 27 per cent.

Only sales in the NT experienced an increase of 43 per cent.

Not surprisingly, all machine categories were down this month. The under 40hp category was down five per cent, the 40 to 100hp range was down 31 per cent for the month while the 100 to 200hp category was also down, this time by 27 per cent.

Sales in the large 200hp-and-over category took a massive hit – down by 60 per cent on the same month last year.  

Combine harvester sales remained healthy in February, supplying the back end of this year’s harvest with a further 20 units being delivered in the month.

Baler sales were in line with last year while sales of out-front mowers continued its downward trend, off by three per cent this month.

The TMA listed three possible causes for the dip in sales:

According to the TMA, new vehicle offshore pre-loading biosecurity requirements introduced by the Australian Government’s Department of Agriculture and Water Resources require all new and used vehicles imported to Australia to meet strict new biosecurity requirements before being allowed into the country.

These requirements include inspections, treatment if necessary, and documentation to verify compliance.

“A senior industry figure contacted by the TMA has confirmed these additional regulations are creating significant bottlenecks at the wharves, with long waiting times for shipping vessels to be processed,” said TMA Executive Director, Gary Northover.

Under the new regulations, if any foreign material is found on any item of imported machinery, the whole shipment is put on hold for de-seeding and further cleaning.

“This slow and manual process can only take place at approved facilities, causing enormous inefficiencies in the system and leading to huge volumes of vehicles sitting in quarantine awaiting processing,” Northover said.

“The delays are also causing significant challenges for shipping companies, with many vessels being forced to divert to other ports in the region.”

To address these challenges, the Australian Government has increased its investment in biosecurity infrastructure and additional resources to speed up the processing of incoming vessels and reduce congestion at the ports.

“Despite these efforts, industry experts warn the processing delays are likely to continue for some time with the complex nature of the biosecurity requirements meaning it is unlikely these issues will be resolved any time soon,” Northover said.

“Particularly affected will be farmers looking to sow winter crops and harvest crops such as grapes, due to an unprecedented backlog in vehicle processing leaving their incoming machinery stuck in ports around the country.”