Tractor sales slow amid supply challenges

After two record-breaking years, it seems the tractor market is starting to slow down as the Tractor and Machinery Association of Australia’s (TMA) latest report showed a 19 per cent drop in new tractor sales in March 2022 compared to the same month last year, and is now 13 per cent behind year-to-date (YTD).

According to TMA executive director, Gary Northover, the slowdown was not attributed to a decline in demand, but instead caused by supply chain issues and problems at the ports leading to lengthy processing delays and a heavily reduced number of stock arriving on Australian shores.

“TMA members are citing issues such as overly lengthy delays in quarantine due to a lack of suitably trained staff to process agricultural equipment and overly expensive container costs sometimes three to four times greater than normal,” he said.

“This, along with a shortage of containers, is leading some suppliers to resort to roll on roll off for products that would ordinarily be containerised.

“Compounding this are reports emerging that due to the severe backlog in unloading ships, shipping companies are simply not allocating as many ships to Australia because it is proving too costly and unproductive for them to do so.”

Northover said the TMA has made a submission to the Productivity Commission for its review into the efficiency of the Maritime Logistics System, but expects findings and improvements to be years away.

“It would have been great to see some attempts to improve the situation in the recent Federal Budget pending this review but sadly, it was not to be,” he said.

Tractor sales in all states were down in March. In NSW, sales were down 21 per cent for the month and 10 per cent behind last year, while Queensland was down 11 per cent to sit five per cent behind the year. Victoria was 12 per cent behind last March to be 10.4 per cent down YTD.

Sales in Western Australia also recorded another drop – 35 per cent for the month to be 34 per cent off YTD, while sales in South Australia also dropped 32 per cent YOY. Tasmania sales dropped further by 17 per cent while sales into the Northern Territory were steady.

In terms of the reporting categories, the under-40hp category was down 18 per cent to be nine per cent off YTD. The 40-to-100hp range dipped for the first time in a while –down six per cent in the month to remain one per cent ahead YTD. The 100 to 200hp category was down 21 per cent.

After months of stellar sales figures thanks to Government incentives, the large 200hp and over range has dipped again, this time by 39 per cent compared to the same month last year.

Baler sales enjoyed a 36 per cent lift in March compared with the same month last year, while sales of out-front mowers were down by six per cent.

“Demand for agricultural machines is presently very strong worldwide and with the increase in costs being felt across the board, some price rises are beginning to occur as they appear to be in many other industries,” Northover said.

“With the Temporary Full Expensing Program set to run until June 2023, we expect demand to remain high.”