After disruptions to the market caused by Covid and related stimulus programs, new tractor sales in Australia have slowed. We are now experiencing a period of realignment back into a regular purchasing cycle which is also being influenced by higher interest rates, lower commodity prices and seasonal conditions conducive to lower production volumes.
In a recent pulse survey conducted by Kynetec for the purpose of understanding the sentiment of farmers towards machinery purchases, 184 farmers which cover a total area of 536,498 hectares provided some valuable insight. Of the 184 farmers , 61% or 112 said their last tractor purchase was a new machine. When analysing the timing of the purchase, we can see that 13% were in the previous 6 months, and 14% were in the previous 6 to 12 months. 30% of these purchases took place 5 or more years ago.
The big question on everybody’s mind is when will purchases pick up again. From our surveyed farmers, the sentiment is that things will start moving again soon. If we just look at the responses from farmers whose last tractor purchase was a new machine, and keeping in mind the survey was conducted in mid July, 11 % have stated they will be looking to make their next purchase in the next 12 months from July, and a further 18% in the next 1 – 2 year period. This fits well with the reported replacement cycle and farmers realigning their recent purchases with their replacement cycles.
We also asked farmers about their economic outlook. Of those whose last tractor purchase was a new machine, the sentiment is that their current economic situation is good to very good for 49% of respondents, and 46% also felt their economic situation is growing over the next 2 to 3 years. This all bodes well for machine sales to bounce back and for us all to look back on this period and go well that was a blip in the radar!
For more information, contact Kynetec at melinda.haley@kynetec.com