Tractor sales maintain hot streak

New tractor sales in August were again phenomenal, up by 22 per cent on the same month last year and are now 2.5 per cent up on the 2022 year-to-date, according to the Tractor and Machinery Association of Australia (TMA).

“This is a particularly strong result given the rush of buyers that occurred in June, keen to maximise use of the Federal Government's Temporary Full Expensing Program,” said TMA executive director, Gary Northover.

“As we have been reporting for some months now, the industry's ability to deliver tractors in such large quantities is due to the regular forward ordering that has been occurring for two years now in anticipation of supply challenges.

“The fact remains that if a farmer wants a specific bespoke tractor ordered from the factory then delivery will be at least 12 months, indeed most dealers now are resisting taking forward orders because of the uncertainty surrounding supply combined with the price movements that are beginning to occur across the board.”

Tractor sales in Australia has been on a hot streak for over two years now, with ideal seasonal conditions and record harvests prompting farmers to invest in equipment like never before. The Federal Government’s instant asset write off and temporary full expensing programs were also major factors in enticing farmers to spend up before the incentives run out next year.

In fact, at the recent TMA conference, agricultural market research company, Agriview, said the year 2021 was a record year for farm machinery dealers and manufacturers, with tractor sales hitting an all-time high of 17,090.

Breaking the numbers down by state, NSW sales was up eight per cent in August to be one per cent behind last year. Queensland was up 46 per cent to sit 13 per cent ahead YTD while Victoria was 24 per cent up on last August due mainly to supply of smaller horsepower units and is now up three per cent on last year.

Sales in Western Australia was up 30 per cent for the month and are now ahead two per cent YTD due to the further arrival of larger machines. South Australia was up 13 per cent for the month while Tasmania was down by 23 per cent. Lastly, sales into the Northern Territory were up 89 per cent.

Looking at the performance reporting categories, the small under-40hp category was up strongly by 25 per cent to be 10 per cent ahead YTD. The 40-to-100hp range was up 21 per cent in the month to remain four per cent ahead YTD while sales in the 100-to-200hp category also rose by seven per cent YOY to sit four per cent behind YTD.

The large 200hp plus range was once again the standout in August, as sales increased by 55 per cent compared to the same month last year but still one per cent off YTD.  

Combine harvester sales are also ramping up in preparation for this year’s harvest and are now 19 per cent ahead of the same time last year.

“There is every expectation of another 1,000+ year for this product as the renewal of fleets occurs in anticipation of another bumper harvest,” Northover said.

Baler sales, on the other hand, have slowed through winter and are now down 19 per cent compared with last year. Sales of out-front mowers were also slow, down three per cent YOY.

With superb conditions and sales holding strong for years now, an inevitable question on everyone’s mind is, when will this incredible upswing end?

“With tractor sales running at around 50 per cent ahead of what has traditionally been seen as a great year, there is no doubt that this can’t continue,” Northover said.

“Delays in supply have served to smooth out the peaks in the market but we are beginning to see signs of when the current boom might end.”

Northover said steadily rising ownership costs, purchase prices and financing costs; as well as the looming deadline for the current tax incentives will most certainly impact the market.

“The challenge for dealers will be to get the timing right regarding inventory given the prospect of machines ordered 12 to 18 months earlier, might arrive at a period of weakened demand.”