Tractor sales dip further in November

Seemingly stable conditions in October failed to last as tractor sales dipped a whopping 15 per cent in November, demonstrating that impact from the drought is far from over.

According to the Tractor and Machinery Associations of Australia’s (TMA) latest report, tractor sales are now sitting two per cent behind on a year-to-date basis.

All four reported categories experienced dips, most notably in the smaller size ranges. Under-40hp tractors reported a drop of 22 per cent for the month and nine per cent behind year-to-date. The 40hp to 100hp range was also down 22 per cent and six per cent behind year-to-date.

Larger tractors in the 100hp to 200hp range were behind two per cent and remain around six per cent ahead of last year while the above-200hp tractors were down two per cent and seven per cent behind year-to-date.

TMA executive director Gary Northover cited farm rationalisation as a possible cause for lesser demand.

“We have previously spoken of the influences that impact a tractor sale, in particular, the roles that improved technology and lower interest rates have had. Offsetting this to some degree is the renewed focus farmers appear to be applying to machine utilisation, particularly at the high end,” he said.

“It is perhaps not surprising that when conditions tighten up a bit, focus turns to capital utilisation and this is no different with agricultural products.

“We continue to see farm rationalisation occurring and when neighbouring farms combine, there will always be the potential for greater sharing of assets. This hasn’t been too much of a priority over the last five years or so but now appears to be occurring to a greater extent leading to a lessening of demand for new product.”

Sales activity continues to vary around the nation with Western Australia having a bumper year, with sales up 15 per cent in November and now sitting eight per cent ahead on a year-to-date basis.

Conditions in South Australia were more unpredictable, with tractor sales down 25 per cent for the month but seven per cent ahead of last year. The Northern Territory and Tasmania were both ahead of last year’s figures.

Sales in the drought-affected Eastern States continue to decline, unsurprisingly. NSW is the hardest hit, down 25 per cent for the month and 10 per cent behind on last year; while Queensland was down 17 per cent in November and five per cent for the year. Victoria also recorded a drop of 7.5 per cent for the month and sitting 1.4 per cent behind annually.

Across the other machinery categories, TMA reported that harvester sales have limped along again in November with dealers reporting an absence of new sales and are instead focused on trying to do deals that might see a machine held for delivery next year. On a year-to-date basis, harvester sales sit 23 per cent behind last year.

It was a very different story for baler sales as it jumped by 53 per cent in November, putting them 12 per cent ahead of last year.

“Clearly there has been a lot more hay cut this year in response to the prevailing conditions,” Northover said.

Sales of out-front mowers dipped by 16 per cent for the month and now 10 per cent behind on last year.

“By years end, we will have broken a 5-year cycle of continuously increasing tractor sales volumes and we expect 2019 to be much the same,” Northover said.

“Whilst there are areas of the market that remain strong, we believe that the impact of the drought will be felt for some time to come.”