Sales of Agricultural tractors have recorded another decline in May, this time off 19% compared to the same month last year. So far this year we have seen around 5,400 tractors sold compared to around 6,800, a drop of around 21%. Expectations of a June spurt as buyers take advantage of the end to the Instant Asset Write Off scheme are now low as the combined impact of higher interest rates, stock availability, machinery price rises along with a general drop in demand is seeing sales reduce.
The forward outlook is beginning to show signs of a greater than anticipated slowdown.
Whilst demand for agricultural products remains strong, a recent ABARES forecast highlights the likelihood of an El Nino weather pattern occurring later this year. This forecast has already begun to impact the thinking of some farmers with a pullback in spending likely.
Despite this we foresee a reasonable realignment of the industry as the features and benefits of new tractors continues to meet the needs of customers
Sales around the nation were down across the board with Victoria off 22% on the same month last year to be 30% behind year to date. Queensland was down 19% and is now 16% behind year to date, NSW was down 16% to be 23% off YTD. Sales in Western Australia reported a drop of 1% despite another strong sales of high hp tractors but remains 12% behind last year. South Australia recorded a 16% drop and now sits 12% behind YTD and Tasmania was off 48% for the month, 26% off YTD with sales in the NT finishing 47% down but remainimng 2% up YTD.
Looking at the machine categories, we find that the 200 hp (150kw) PLUS range jumped again this month, this time up 29% but remaining 6% behind last year. The small under 40 hp (30kw) category, the category most likely to be affected by interest rates, was down by 21% for the month and is now 18% behind year to date. The 40 to 100hp (30-75kw) range was also well down, 28% in the month and is now 24% behind year to date, the 100 to 200hp (75-150 kw) category was down, this time by 27% and remains 28% behind YTD.
Sales of Combine Harvesters have begun occurring in preparation for this year’s season with 27 units sold bringing the year-to-date figure to 123 units. It would appear that another year of greater than 1,000 units is likely. Baler sales enjoyed another jump in May, up 192% on the same month last year and are now up 25% on last year whilst and sales of Out – Front Mowers enjoyed a reversal of recent trends, up 14% for the month.
Just a reminder, the annual TMA conference is being held this year in Sydney on Wednesday July 19th at the Stamford Plaza, Sydney Airport. Ticketing and event information will be available on our website www.tma.asn.au in the coming weeks as we look forward to another great event.