Drought Drives Tractor Sales DownPosted by Gary Northover, 10th October 2018
After a year of strong sales, almost defying expectations, September has seen sales of Agricultural Equipment across the country drop by their greatest amount in recent memory as the impact of the drought well and truly takes hold.
Tractor Sales in particular have been hit across the board, down 18% for the month with the popular under 40hp range leading the way, down 23% and now 7% behind last year.
All four reported size ranges experienced a double digit dip, the 40hp-100hp range down 18% and now in line with last year, the 100hp -200hp range fell 14% but is still the one bright light, up 7% on last year.
Meanwhile the large above 200hp tractors were down 22% on last month and now sit 10% behind on a year to date basis.
Tractor sales have surpassed the 12,000 unit mark in each of the past few years and it now appears highly unlikely that that number will be reached in 2018.
Regionally, the impact was felt right across the nation with the exception of South Australia where deliveries were up 20% on the month and are now 12% up year to date.
Not surprisingly the Eastern States were severely hit, NSW dropping another 36%, now down 7% for the year. Queensland sales were down 22%, 4% behind year to date.
Victorian sales held ground, in line with the month and last year with the dairy sector offsetting some of the stress being felt in the west of the state.
Of some surprise was the dip in sales in West Australia during what has been a strong year, down 6% on last month but remaining 8% ahead year to date; dealers describing this as a pause rather than any real weakness in the market.
Finally, the NT and Tasmania continue to see sales at or around last year’s levels.
September is the first significant month for combine harvesters deliveries and the much anticipated weakness was seen in September’s numbers with a total of 163 units delivered compared to in excess of 300 units for the same month last year. It is expected that this trend will continue for the balance of the year leading to a sharp rise in high priced inventory being held across the country.
Baler sales, not surprisingly, continue to struggle as hay production across the nation remains stressed. On a year to date basis, sales are around 6% behind last year’s levels.
Once again, sales of out front mowers have slowed down 27% for the month and now 5% behind last year.
The recent Field Days at Henty and Elmore have provided a good opportunity to gauge the general atmosphere as seen by dealers, and whilst there is a degree of pessimism prevailing, the general view is that if and when it rains, confidence should be restored.
We expect however, that the combination of exchange rate declines, interest rate increases and possible trade war backlash, will see activity operating at a reduced level for some time.
Gary Northover, TMA