Tractor sales finish year on high, while harvester orders surge
It’s difficult to imagine Australia’s ag machinery buying spree could continue for another 12 months, but if combine harvester orders are any indication, the red-hot market may be here to stay.
Sales of agricultural tractors have exceeded 15,800 units sold for the financial year to June, which is a full 29 per cent ahead of the previous year following a 1 per cent increase in June. This is an outstanding result for the industry and while there is cause for celebration, perhaps the focus should equally be on the effort of manufacturers, importers, dealers and suppliers to industry in getting this job done in such extreme conditions.
Delivering such a result against a backdrop of lockdowns, social-distancing restrictions, supply challenges, staff shortages and climatic extremes is a credit to the industry.
A more detailed look at the numbers reveals that all states have reported increases on the previous year, with NSW leading the pack up 10 per cent in June to finish the year 57 per cent ahead. Victoria was down 2 per cent for June to be 18 per cent up for the year, Queensland up 4 per cent for the month ending 25 per cent up.
Sales in Western Australia dipped 9 per cent in June to be 34 per cent ahead for the year, sales in South Australia reported a 13 per cent decrease for the month to be 10 per cent up full year, Tasmania finished 24 per cent ahead for the year and sales into the Northern Territory enjoyed an 11 per cent yearly rise.
All performance reporting categories enjoyed strong rises for the year with the under 40hp (30kw) range up 27 per cent following a 20 per cent dip in June. The 40-100hp (30-75kw) range was again up strongly 5 per cent in the month, 34 per cent for the year, the 100-200hp (75-150kw) category was steady, ending the year up 20 per cent. The large 200hp-plus (150kw-plus) range had another strong rise up 41 per cent and was 57 per cent ahead for the year.
Sales of combine harvesters have begun in earnest, up 50 per cent on the previous June with dealers reporting solid forward order books.
Baler sales have continued to drift off their recent highs but ended the year up 23 per cent and sales of out-front mowers have finished the year strongly, recording a 33 per cent rise.
While it is hard to anticipate the levels of the past year being repeated, there is no doubt that demand is still hot.
The Federal Government’s temporary full expensing program, which essentially replaces the instant asset write off scheme, will continue to support demand.
Farming conditions and demand for product are in a good place, with locations such as Western Australia looking very prosperous.
Offsetting these positives to some degree are the ongoing supply challenges, due both to factory capabilities and the previously reported shipping challenges.
Dealers’ ability to supply current demand will be wholly dependent on the ordering done last year, with current orders being quoted at nine to 12 months away in many instances.
Pricing pressures are likely to be experienced in the year ahead, with reports of 8-11 per cent lifts occurring in Europe and finally, spare parts supply is being stretched in all directions at the moment and having an impact on the supply chain.
Lastly the TMA has decided to press ahead with its annual conference, to be held once again this year in Melbourne at the Hyatt Essendon Fields on Tuesday, July 20.
It is disappointing that many interstate visitors will be unable to attend, but hopefully the industry can fully reassemble again next year.
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