Small tractors drive sales as big machines wear drought fallout

Tractor sales are up 24 per cent in July, despite the global pandemic, as buyers utilise the instant asset write-off package on under-40hp tractors.

In demand: Smaller tractors have driven an increase in machinery sales in July.

FOLLOWING on from the record June result, the best month in 20 years, the sale of tractors was again strong in July.

With coronavirus lockdowns easing in most states, there is a sense of getting back to work among tractor buyers. The ongoing impact of the Government’s instant asset write-off scheme saw sales rise 24 per cent ahead of July last year and brings the year-to-date figures 21 per cent ahead.

Activity across the states was varied with the continued recovery in NSW the standout to be up a whopping 60 per cent on the same time last year, and now sitting 26 per cent ahead for the year.

Victoria reported another strong month, up 34 per cent and now 30 per cent ahead year-to-date.

Meanwhile, Queensland experienced its first dip in months to be down 7 per cent, but still 14 per cent up for the year.

Western Australia picked up another 5 per cent and now remains 3 per cent behind last year.

Sales in South Australia continue to rally with another strong month now 32 per cent up year-to-date, while Tasmania continues to flourish up 17 per cent for the month and now 24 per cent ahead for the year.

The increase in sales numbers is due almost entirely to the ongoing strength of the smaller end of the market supported by the IAWO scheme.

The under-40hp (30kw) range was up 48 per cent for the month and now sits 20 per cent ahead for the year to date. The 40hp to 100hp (30-75kw) range was again up strongly 29 per cent now 21 per cent ahead for the year. The 100hp to 200hp (75-150kw) category was healthy with the month up 6 per cent, and 36 per cent for the year-to-date.

The strength in the horticultural space is having a big impact on demand for this range strongly supported by the financial incentives in place.

Sales in the large 200hp-plus (150kw) range where again down another 7 per cent, leaving this category 7 per cent behind year-to-date.

Demand for large tractors is being affected by a range of factors, including the persistent drought in regions within northern NSW and southern Queensland, the ongoing challenges felt in some of the key markets serviced by this product, such as the cotton industry and a sense that utilisation levels of the past few years may not have yet warranted large scale fleet replacements.

As reported last month the industry’s ability to continue to deliver strong sales will be determined by the supply of product from international suppliers and early signs are that the demands of the market are largely being met.

Further complicating this position are Stage 4 restrictions in Victoria, which is a key machinery supplier. While agricultural suppliers will continue operating, these restrictions will inevitably affect the way work is done.

With regards to other products, sales of combine harvesters have now slowed with most product now in place for the upcoming harvest season.

The full-year picture is likely to be about 15 per cent-20 per cent down on last year.

Baler sales continue to boom and are up 33 per cent year-to-date while sales of out-front mowers were again healthy and remain 14 per cent ahead of the same time last year.

The TMA/Agriview State of the Industry report for 2019 is now available for purchase.

For more details, visit tma.asn.au