Tractor sales stable in October

Following a tumultuous September of tractor sales due to drought conditions, the agricultural machinery market seems to have bounced back albeit slightly, with most states seeing an increase in sales from the previous month with the exception of New South Wales.

According to the Tractor and Machinery Association of Australia (TMA), this was partly due to end-of-year financial planning from some manufacturers which may have overinflated the position a little.

The organisation’s October sales report showed tractor sales overall were down around 2.5 per cent compared to last October.

However, across the country, Queensland and WA recorded slight improvements, both up around one per cent each for the month. WA recorded a healthy eight per cent up on last year, while Queensland is trailing, down 3.5 per cent year-to-date.

Victorian sales numbers continue to track last year’s while Tasmania, South Australia and Northern Territory all recorded eight to 10 per cent increases from last year’s figures.

NSW continues to have a tough time, recording another 13 per cent drop in sales numbers in October and now sits eight per cent behind last year.

Larger tractor sales gained some momentum in October, with the ‘100 to 200hp’ category the strongest performer with a 14 per cent increase in sales for the month and eight per cent ahead of last year.

“This segment, normally associated with row cropping has been strong for some time now and reflects the healthy state of our vegetable, horticulture and viticulture segments nationwide,” said TMA executive director, Gary Northover.

The above-200hp range had had a great month as well, up 26 per cent and had thus made up a bit of ground from the previous month’s drop, now only seven per cent behind year-to-date.

“These tractors tend to be most closely associated with broadacre farming and we are beginning to see signs of abatement in the demand for large tractors due not only to the climatic conditions but also in response to the ongoing consolidation being seen in large broadacre operation,” Northover said.

“Ultimately, owners of this size range demand an adequate return on their investment and we expect to see greater emphasis on machine utilisation before the next buying cycle resumes.”

Activity in the compact ranges, on the other hand, has been reasonably hard hit.

The under-40hp segment, in particular, is down 10 per cent for the month and seven per cent year-to-date.

“This segment, which contains the ‘leisure market’ appears to track domestic economic sentiment in many ways and we believe that a measure of caution is now being applied in response to such things as the Banking Royal Commission, Share Market volatility and the pending election cycle,” Northover explained.

Over 230 combine harvesters were delivered in October, which was down on last year’s level.

“The expectation is that this will be about as good as it gets for harvesters this year as suppliers begin to look towards sales programs for 2019,” Northover said.

Baler sales recovered off a cyclical low and are now 13 per cent up on last year. In contrast, out-front mowers sales slowed right down, dropping 27 per cent for the month and now 14 per cent behind last year.