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November 8, 2018

Tractor Sales steady in October, NSW continues to do it tough

Following a dramatic downturn in September where sales of tractors dropped markedly, October has seen a steadying of the ship with a slight recovery in machine sales occurring. This was partly due to some “end of year financial planning” from some manufacturers which may have overinflated the position a little.

The story across the nation was reasonable, however, the most drought affected regions of NSW continue to be hard hit with sales still in decline.

Overall, tractor sales were down around 2.5% compared to last October and are now broadly in line with last year on a year to date basis.

Queensland and WA recorded slight improvements, up around 1% each for the month. WA a healthy 8% up on last year, and Queensland still trailing, down 3.5% YTD.

Victorian sales continue to track last year whilst the bumper years in Tasmania (up 8%), South Australia (up 10%) and Northern Territory (up 8%) round out the story.

As stated, NSW are having a difficult time, the month was down another 13% and now sits 8% behind last year.

Larger tractor sales were the order of the day for October, the 100hp -200hp category the strongest with sales up 14% for the month and  now 8% ahead of last year.

This segment, normally associated with “Row Cropping” has been strong for some time now and reflects the healthy state of our vegetable, horticulture and viticulture segments nationwide.

The large range above 200hp had a great month, up 26% (partially impacted by the aforementioned EOFY activity) and has made up a bit of ground, now only 7% behind YTD.

These tractors tend to be most closely associated with Broadacre farming, and we are beginning to see signs of abatement in the demand for large tractor,s due not only to the climatic conditions but also in response to the ongoing consolidation being seen in large broadacre operations. Ultimately, owners of this size range demand an adequate return on their investment and we expect to see greater emphasis on machine utilisation before the next buying cycle resumes.

Activity in the small size ranges has been reasonably hard hit. The under 40 hp segment in particular is down, 10 % for the month and 7% YTD. This segment, which contains the “leisure market” appears to track  domestic economic sentiment in many ways and we believe that a measure of caution is now being applied in response to such things as the Banking Royal Commission, Share Market volatility and the pending election cycle.

There were 233 Combine harvesters delivered in October which was down on last year’s level. The expectation is that this will be about as good as it gets for harvesters this year as suppliers begin to look towards sales programs for 2019.

Baler sales have made a recovery off what was a cyclical low and  are now 13% up on last year and once again Out Front Mowers were slow, down 27% for the month and now 14% behind last year.

Gary Northover, TMA