Tough year for tractor market

The tractor market has finished 2018 down 4.1 per cent on the previous year following one of the most challenging years on record for the farming sector, according to the Tractor and Machinery Association of Australia (TMA).

The TMA said this was the first negative growth in five years, with the trend expected to continue in 2019.

“There are numerous factors driving sales results but most believe the drought, combined with many farmers taking a more conservative stance with regards to purchasing, have had the greatest effect,” said TMA executive director, Gary Northover.

“The ongoing impact of the drought in the eastern States will be felt for some time but in general, farmers are expected to view purchases a little more conservatively in the period ahead,” he said.

“Not unlike investors in other fields of the broader economy, the tightening of lending by the banks and reductions in the exchange rate, whilst good for commodity exports, will also impact.”

That being said, there were still in excess of 12,000 tractors reportedly sold last year, which TMA said was still a very strong year by any measure.

December sales were notably down across the board compared to November figures due partly to a short month restricting deliveries.

The smaller under-40hp category was down 10 per cent on the previous year, having dropped a further 22 per cent in December.

“This category is dominated by the leisure sector and we are seeing some pullback in demand from these customers,” Northover said.

The 40hp to 100hp category also recorded a drop, down 13 per cent in December and ending up six per cent behind the previous year.

“The best performing category for the year continues to be the 100hp to 200hp segment, emphasising the strength of the row cropping market,” Northover said.

“Whilst December was down 15 per cent for the month, the year finished five per cent ahead of 2017.”

Finally, the larger over 200hp broadacre tractor segment was down 22 per cent in December, finishing the year eight per cent behind 2017.

Around the nation it was, not surprisingly, NSW that was hardest hit – with sales recording an 11 per cent drop from the previous year with December being 25 per cent down. Queensland finished the year 16 per cent down in December and six per cent down on 2017 numbers.

Victorian sales also struggled, finishing three per cent behind on the previous year. Meanwhile, all other states reported an increase in sales, with WA finishing 8.3 per cent ahead of last year. South Australia was up 2.5 per cent, while Tasmania finished nine per cent ahead of 2017 numbers.

Northern Territory figures were also up seven per cent on previous year.

In other machinery segments, harvester sales finished well down on 2017 figures. A total of 676 units were sold which was down by about 200 compared to the previous year.

“The conditions surrounding this market are well known and with the ordering windows now open, dealers are faced with the challenge of what to order,” Northover said.

“Needless to say, conditions are suited to savvy buyers able to take advantage of the available stock.”

Baler sales, on the other hand, had a year of recovery, with sales recording a 14 per cent increase on the previous year as many turned to hay production in the face of dwindling crop yields.

Sales of out-front mowers were not so rosy, finishing 15 per cent behind 2017.