Tractor sales strong, supply remains an issue

Tractor sales in October continued its upward trend, recording a strong 25 per cent increase on the same month last year and 22 per cent up year-to-date, the Tractor and Machinery of Association of Australia (TMA) has reported.

The organisation said the strong result will see the market on track to exceed the 13,000-unit mark for the first time since the 1980s.

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While there remains considerable buoyancy in the market off the back of the Instant Asset Write off program and a very strong year for agricultural product, the market is also seeing the impacts of the pandemic on factories and shipping across the globe affecting supply, according to TMA executive director, Gary Northover.

“Most dealers are not yet reporting lost business, but many are having to keep a sale by offering an alternative,” he said.

“This situation is likely to continue for the foreseeable future as, not only is factory output down due to social distancing requirements, the number of cargo ships in operation is also down further exacerbating the problem.

“We estimate that this has added around 12  to 16 weeks to most deliveries. In addition, the supply of parts remains challenging and suppliers are being hit with additional freight charges to get parts into their systems.”

Sales activity across the states was strong with NSW again leading the pack with a whopping 70 per cent increase from the same time last year and now sitting 34 per cent ahead for the year.

Victoria reported a steady month and remains 24 per cent ahead YTD meanwhile Queensland was up 12 per cent from October 2019 and is now up 13 per cent for the year.

Western Australia sales picked up five per cent from last year but remains three per cent behind YTD.

Sales in South Australia continue to fly, now 36 per cent up YTD, while activity in Tasmania also remains strong, now 28 per cent ahead for the year.

The increase in sales numbers sits almost entirely within the smaller end of the market supported by the Instant Asset Write off scheme. The under 40hp range was up 33 per cent for the month and now sits 29 per cent ahead for the year to date.  

The 40 to 100hp range also recorded strong numbers - up 41 per cent now 24 per cent ahead for the year.

The 100 to 200hp category was up 12 per cent and up 28 per cent YTD while sales in the 200hp and above range held steady, leaving this category eight per cent behind YTD.  

In other product categories, sales of combine harvesters are picking up with the full year picture anticipated to be around 15 per cent to 20 per cent up on last year.

“While not nearing record numbers of 800 plus units, a figure of 650 to 700 is likely,” Northover said.

Baler sales continue to boom, up 21 per cent for the month and remaining 31 per cent ahead YTD, while sales of out-front mowers were strong and sitting 21 per cent ahead of the same time last year.

“With the current La Nina weather pattern being experienced across much of Australia and interest rates at an all-time low, the picture for supply is challenging and is expected to remain so for some time to come,” Northover concluded.