Tractor sales could be best in decades

The year 2020 has seen the worst global economic conditions since the Great Depression, but it also looks set to be a record year for tractor sales in Australia, thanks to excellent Government tax incentives.

The Tractor and Machinery Association of Australia (TMA) reported that sales in the month of September were up 29 per cent on the same month last year and are now up 22 per cent year to date.

“The ongoing demand for agricultural produce combined with favourable weather conditions across the nation, supported by the Federal Governments Instant Asset Write Off program are supporting record sales volumes,” said TMA executive director, Gary Northover.

The TMA added tractor sales are headed for a record year, with numbers looking set to surpass 13,000 for the first time since the 1980s. The last time tractor sales hit record numbers was in 2017, with sales exceeding 12,000 units.

The news was a stark contrast to predictions made at the start of the year of an average year ahead with tractor sales predicted to be in the range of 9000 to 10,000 units.

Activity across the states was very positive in September, with the continued recovery in NSW remaining the standout point. The state recorded a whopping 41 per cent increase on the same time last year and is now sitting 30 per cent ahead for the year.

Victoria reported another strong month, up 27 per cent YOY and now 22 per cent ahead YTD, while Queensland was up 22 per cent on last year and 14 per cent ahead for the year.

Sales in South Australia are back on track with another strong month after a poor 2019, now 60 per cent up YTD. Tasmania also recorded strong sales last month, now 25 per cent ahead for the year.

The only exception was Western Australia which recorded slightly lower sales due to negative weather events and remains four per cent behind last year.

Across the horsepower segments, the under 40hp range once again reigned supreme, mainly thanks to the Instant asset write-off scheme. The segment recorded a 71 per cent increase for the month and now sits 29 per cent ahead YTD.

The 40 to 100hp range saw a growth of 27 per cent, now 22 per cent ahead for the year.

The 100 to 200hp category bounced back from August figures, recording an increase of  26 per cent YOY and still up 31 per cent YTD.

Sales in the over-200hp range, however, continued to slide. It was down 23 per cent compared to the same time last year, leaving this category nine per cent behind YTD.

“Demand for large tractors is being impacted by a range of factors including the persistent drought in regions within Northern NSW and Southern Queensland and the ongoing challenges being felt in the West,” Northover said.

“Further pressure is being felt as a result of recent price increases.”

In other product lines, sales of combine harvesters remain steady with most product now in place for the upcoming harvest season. The full year picture is likely to be around 15 to 20 per cent down on last year.

Sales of hay tools remain strong with baler sales up 38 per cent and out-front mowers up 15 per cent YTD.

“The outlook for the industry remains extremely positive, particularly in light of the recent budget announcements still to be approved in parliament,” Northover said.

“Initiatives such as the extension of the Instant Asset write off program, incentives for apprenticeships and increased investment in R&D go a long way to building confidence in the industry.

“The current La Nina weather pattern being experienced across much of Australia, combined with historically low interest rates, augers well for the year ahead.”