Drought hits tractor sales

The Southern Farmer
photo by Ian Turnell

TRACTOR sales slid four per cent overall for 2018 as the on-flow of drought conditions moved into machinery sales.

Conservative sales saw the first year of decline after five continuous years of growth for the industry.

“The ongoing impact of the drought in the eastern states will be felt for some time but in general, farmers are expected to view purchases a little more conservatively in the period ahead,” Gary Northover, executive director with the Tractor and Machinery Association of Australia, said.

“Not unlike investors in other fields of the broader economy, the tightening of lending by the banks and reductions in the exchange rate, while good for commodity exports, will also impact.”

The biggest pullback was seen in the small under 40HP sector, with sales down 10 per cent for the year.

The 40hp to 100hp group was down also, six per cent behind last year, with the broadacre tractors – those over 200hp – down eight per cent overall.

“The best performing category for the year continues to be the 100hp – 200hp segment, emphasising the strength of the ‘row cropping’ market,” Mr Northover said.

Around the nation it was, not surprisingly, NSW that was hardest hit – being 11 per cent behind last year, with December being a further 25 per cent down.

“Victorian sales struggled along through the year finishing three per cent behind,” Mr Northover said.

Harvester sales for the year finished well down, almost 200 units less compared to 2017.

In contrast, baler sales had a year of recovery, up 14 per cent on the previous year as many turned to hay production in the face of dwindling crop yields.

Although many dealerships in the Southern Farmer region did feel the decline, those in peri urban and winery regions were somewhat sheltered.

Gordon Watkins, from AgPower in Lilydale, said the Yarra Valley was not as affected as the rest of the state.

“We are in a different industry with the vineyards, so we are not exposed to the drought in outer areas; our figures are much the same as last year,” he said.

“We are fortunate – we have a lot of business with small hobby farms and councils, rather than the broadacre high ticket items.”

Shannon Hogg runs The Tractor Company, a father and son operation based at Pakenham.

Stocking Deutz Fahr and Kioti tractors, the business made higher than average sales in the hobby tractor market, but took a hit in the larger category.

“The drought has had an impact – everybody is holding on to what they’ve got at the moment to get through another year,” Mr Hogg said.

“A lot of hobby farmers are buying, but there are no real big tractor sales going through – it’s dropped off one side and picked up the other.”

With cattle, lamb, wool and cropping prices all predicted to gain traction over the coming year, it is expected that tractor sales will hold steady, with 2020 tipped to see an increase in the market.

More farming news and stories can be read in the February, 2019 print edition of The Southern Farmer or click here to access digital editions.