Tractor market slumps further
November figures paint a bleak picture of agricultural machinery marketThe Tractor and Machinery Association of Australia (TMA) has forecasted a total of 9000 tractors sold this year, a big drop from 12,000 recorded in previous peak years.
November tractor sales have suffered yet another decline, dropping 16 per cent from October and now sitting 11 per cent behind last year.
“The full year picture is now down to a forecast of less than 11,000 tractors and the promise of the market holding at a reasonable level in 2020 is now diminishing,” said TMA executive director, Gary Northover.
Across the country, NSW continued to experience the biggest fall in sales with a further 28 per cent drop in November, now 20 per cent behind last year. Queensland slipped another 19 per cent in the month and is now eight per cent behind for the year. Western Australia, which until recent times had been reporting sales increases, dropped a whopping 35 per cent for the month and is now just one per cent ahead of last year. South Australian sales continued to struggle, down six per cent in November and now 25 per cent behind last year.
Activity in Victoria remains reasonably strong, in line with the same month last year and about three per cent behind last year.
“The horticultural and wine growing markets appear to be travelling well in the Southern States and this is felt to be a big part of Victoria’s activity,” Northover said.
Lastly, Tasmanian sales dipped but remain four per cent ahead year-to-date and sales in the NT are sitting in line with last year.
Sales in the 200hp and above range were again down substantially, 22 per cent behind for the month and now six per cent behind year-to-date. The 100 to 200hp steadied, in line for the month but remaining 11 per cent behind last year.
The 40 to 100hp range was also down 19 per cent now sitting 13 per cent behind last year. The under 40hp range struggled and is down 27 per cent in November remaining 10 per cent behind on a yearly basis.
Combine harvester sales have been ordinary this year, now more than 20 per cent behind last year with very few forward orders being reported.
“The relative strength in WA is being more than offset by the impact of the drought in the eastern states and it will take some years yet for this market to fully recover,” Northover said.
On the other end of the spectrum, hay equipment has enjoyed a bumper year but this category too is showing signs of tapering as the year draws to a close. Baler sales dipped 18 per cent in November but remain 14 per cent ahead on a year-to-date basis.
Sales of out front mowers also dropped considerably, down 34 per cent in the month now sitting five per cent behind last year.
The TMA also recently published findings from its Quarterly Dealer Business Sentiment Survey and said the results reflect challenges currently faced by dealers across the country.
Some of the key findings include:
- Over 50 per cent of dealers expect turnover to decline while 41 per cent expect turnover to remain unchanged.
- Sales of new equipment is expected to remain unchanged with stocks of new machinery held on dealers’ floors considered to be average.
- Used equipment stocks are also considered to be at average levels for both tractors and combine harvesters whereas stock levels for balers, hay equipment, self-propelled sprayers and implements are considered to be low.
- Parts inventory levels are trending higher but still below the peak levels recorded in September 2018.
- Despite tougher trading conditions, there has been an increase in the number of dealers who see no reason to change their employment levels.
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