Tractor sales slowdown “greater than anticipated”

Sales of new agricultural tractors have slowed further in May, this time down by 19 per cent on the same month last year, the Tractor and Machinery Association of Australia (TMA) reported.

So far this year, around 5400 tractors were sold compared to 6800 last year, a drop of around 21 per cent.

“Expectations of a June spurt as buyers take advantage of the end to the Instant Asset Write Off scheme are now low as the combined impact of higher interest rates, stock availability, machinery price rises along with a general drop in demand is seeing sales reduce,” said TMA executive director, Gary Northover.

Combined with BOM’s forecast of warmer and drier months ahead, the slowdown in tractor and agricultural machinery sales will be greater than expected, the TMA said.

“Whilst demand for agricultural products remains strong, a recent ABARES forecast highlights the likelihood of an El Nino weather pattern occurring later this year,” Northover said.

“This forecast has already begun to impact the thinking of some farmers with a pullback in spending likely.

“Despite this we foresee a reasonable realignment of the industry as the features and benefits of new tractors continues to meet the needs of customers.”

Sales around the nation were down across the board with Victoria off 22 per cent on the same month last year to be 30 per cent behind year to date. Queensland was down 19 per cent and is 16 per cent behind year to date, while New South Wales was down 16 per cent to be 23 per cent off YTD.

Sales in Western Australia reported a drop of one per cent despite strong sales of high hp tractors but remains 12 per cent behind last year. South Australia recorded a 16 per cent drop and now sits 12 per cent behind YTD.

Sales in Tasmania were down 48 per cent for the month and 26 per cent off YTD, while sales in the Northern Territory finished 47 per cent down but sits two per cent ahead YTD.

In regard to machine categories, the 200hp plus range jumped again this month, this time up 29 per cent YOY but remaining six per cent behind YTD.

The under 40hp category, most likely to be affected by interest rates, was down by 21 per cent for the month and is now 18 per cent behind YTD. The 40 to 100hp range was also some ways off, down 28 per cent compared to this time last year and 24 per cent behind year to date.

Lastly, the 100 to 200hp category was down by 27 per cent and remains 28 per cent behind YTD.

Sales of combine harvesters have commenced in preparation for this year’s season with 27 units sold bringing the year-to-date figure to 123 units. TMA said another year of 1000 unit combine sales is likely.

Baler sales went up again in May, a 192 per cent jump on the same month last year and are now up 25 per cent on last year. Sales of out-front mowers also increased, this time by 14 per cent YOY.