October tractor sales fall, but market is still healthy

After a solid September result, October sales for agricultural tractors suffered another decline down 9 per cent for the month and now 11 per cent behind the same time last year, writes Gary Northover.

National decline: Tractor and Machinery Association of Australia executive director Gary Northover

AFTER a solid September result, October sales for agricultural tractors suffered another decline, to be down 9 per cent for the month.

Now, sales are 11 per cent behind the same time last year.

With two months of this year remaining, the industry should report total sales of about 11,000 tractors.

While down on the past five years of 12,000-plus sales, it still represents a healthy market place.

The unknown in all of this is the margin being achieved, which in recent times has been severely challenged.

Falls were felt in all size categories other than the under-40hp (30kw) range in all states.

The Victorian market was the exception, recording an 11 per cent rise for the month. It is now 3 per cent behind October last year.

Strong activity in the dairy sector, along with a healthy degree of optimism among wine growers, is felt to be behind this rise.

Across the nation, it continues to be NSW experiencing the greatest declines with a further 21 per cent drop last month, and now 20 per cent behind October last year.

Queensland slipped 14 per cent in the month, conpared to last October, and is now 7 per cent behind for the year.

There have been pockets of strong sales activity in the coastal regions of these states, but this has not been enough to offset the drought-affected inland markets

Western Australia had a surprisingly quiet month to be down 14 per cent compared to October last year, but still ahead of last year by about 4 per cent.

South Australian sales have gone from bad to worse with a massive 30 per cent drop last month, now a full 27 per cent behind the same time last year.

As previously reported, there appears to be a lot of used equipment activity meeting demand there.

Tasmanian sales continue to be strong, now 5 per cent ahead year-to-date and sales in the Northern Territory dropped for the month, now 7 per cent behind last year.

Sales in the 200hp (150kw) and above range were down substantially, 25 per cent behind for the month and now 5 per cent behind year-to-date.

The 100hp to 200hp (75-150kw) segment also suffered a big drop, down 8 per cent for the month, remaining 12 per cent behind last year.

The 40hp to 100hp (30-75kw) range was also down 12 per cent and is now sitting 13 per cent behind last year.

The only bright spot was the under-40hp (30kw) range, up 3 per cent last month, but remaining 8 per cent behind on a year-to-date basis.

Combine harvester sales continue to struggle, with levels well down on previous years.

Markets such as the north and northwest regions of NSW have essentially come to a stop through this drought period.

Demand for hay remains strong and baler sales continue to enjoy a bumper year. Last month’s sales were up another 11 per cent on last year and are now 26 per cent ahead on a year-to-date basis.

Finally, sales of out-front mowers bounced another 7 per cent in the month in response to the spring grass-growing season, and are now sitting just behind last year on a yearly basis.

● Gary Northover is the executive director of the Tractor and Machinery Association of Australia