TMA 2018 conference: Machinery sales at all-time high

It was another record year for the agricultural machinery market in 2017 when the aggregated sales of major new machinery lines including tractors, combine harvesters and self-propelled sprayers topped $2.31 billion.

According to the latest State of the Industry report, compiled and released by market research firm Agriview at the recent Tractor and Machinery Association of Australia (TMA) conference, that represents a 5.1 per cent jump from 2016's figures.

In 2017, there were 12,700 new tractors sold, recording a value of $1,309.8 million. Last year also marked the tenth year in a row that tractor sales hit over $1 billion.

Combine harvester sales also grew year-on-year to reach $529.5 million in 2017, a 1.2 per cent increase from the previous year. According to Agriview’s report, this was due to increased sales of larger class 9 machines.

The hay and forage equipment market had a mixed season, with sales of balers, hay tools and windrowers totalling $183.8 million, a 10 per cent drop from 2016 numbers.

“Overall the market for machinery remained buoyant due in part to the historical high level of farm production in both gross and net value terms, strong farm export performance and relatively stable farm costs,” said Agriview director, Alan Kirsten.

“Add to this the continued low interest rate finance environment Australia’s farmers have invested heavily in updating plant and equipment over the last ten years.”

Based on 2017 sales numbers, it is evident that buyers are continuing to drift into the larger tractor segments, with the over-100hp and over-200hp sectors recording their best results in decades.

The 100hp to 200hp row crop market segment saw its best result in 30 years, selling a total of 3663 tractors worth just over $434 million.

Sales of tractors over 200hp reached its best in 20 years with 1802 machines sold, representing an eight per cent increase on 2016’s figures.

The 60 to 100hp utility tractor segment also posted a 5.9 per cent growth, having sold 2577 units worth $140.1 million.

According to Kirsten, the year opened up with lower forward order banks particularly for higher value machinery lines, and there are no signs of a pick-up in demand.

“But this will not show up in the numbers as six to nine month lead times are the norm for most mid to high horsepower tractors and specialised machinery,” he said.

“We now look to the second half of the year to start reflecting the real demand over the first half of 2018 to give a true picture of how the various markets are performing.

“There are clear signs that demand has slowed and it is quite clear that the lack of rain is not helping,” Kirsten added.

“If we do not get widespread rains particularly in the eastern states of the country in the next few weeks, then for the first time in a long time drought will cause considerable problems for the industry.”

He added there is currently plenty of inventory in both company stores and dealer lots with shipments continuing to arrive, but if demands do not increase, it will prove to be a problem for everyone concerned.

The theme of the TMA conference this year was “Thriving in the Face of Disruption” where delegates heard all about disruption in the agriculture industry, in terms of technology, job market, consumer behaviour and future of food; as well as ways to handle these challenges.