Tractor market feeling the pinch

After a year of strong sales, almost defying expectations, September has seen sales of agricultural equipment across the country take the biggest plunge in recent times as the impact of the drought well and truly takes hold.

The Tractor and Machinery Association of Australia (TMA) reported that tractor sales in particular have been hit across the board, down 18 per cent for the month. The popular under-40hp range was hit the hardest, down 23 per cent and now seven per cent behind last year.

All four reported size ranges experienced a double digit dip - the 40hp to 100hp range fell 18 per cent and now in line with last year, while the 100hp to 200hp range fell 14 per cent but is still up seven per cent on last year’s figures.

Meanwhile, sales of above-200hp tractors were down 22 per cent on last month and now sit 10 per cent behind on a year-to-date basis.

“Tractor sales have surpassed the 12,000 unit mark in each of the past few years and it now appears highly unlikely that that number will be reached in 2018,” said the Tractor and Machinery Association of Australia’s (TMA) executive director, Gary Northover.

Regionally, the impact was felt right across the nation with the exception of South Australia where deliveries were up 20 per cent on the month and are now 12 per cent up year-to-date.

Unsurprisingly, the Eastern States where drought is prevalent were severely hit, with sales in NSW dropping another 36 per cent, now down seven per cent for the year. Queensland sales were down 22 per cent, now four per cent behind year-to-date.

Sales in Victoria held ground, in line with the month and last year with the dairy sector offsetting some of the stress being felt in the west of the state.

Of some surprise was the dip in sales in Western Australia during what has been a strong year, with a six per cent drop on last month but remaining eight per cent ahead year-to-date. TMA said dealers has described the dip as a pause rather than a weakness in the market.

Finally, the Northern Territory and Tasmania continue to see sales at or around last year’s levels.

Sales of combine harvesters in September matched the market anticipation of a slump, with a total of 163 units delivered compared to in excess of 300 units for the same month last year.

“It is expected that this trend will continue for the balance of the year leading to a sharp rise in high priced inventory being held across the country,” Northover said.

Baler sales continue to struggle as hay production across the nation remains stressed. On a year-to-date basis, sales are around six per cent behind last year’s levels.

Sales of out front mowers are no better, slowing down by 27 per cent for the month and now five per cent behind last year.

“The recent field days at Henty and Elmore have provided a good opportunity to gauge the general atmosphere as seen by dealers and whilst there is a degree of pessimism prevailing, the general view is that if and when it rains, confidence should be restored,” Northover said.

“We expect however, that the combination of exchange rate declines, interest rate increases and possible trade war backlash, will see activity operating at a reduced level for some time.”