Tractor sales go gang busters

Sep 15, 2022

Tractor sales are ploughing along but the Tractor and Machinery Association of Australia says sales will no doubt soften. Photo by Michael J. Newell

Sales of agricultural tractors in August were again strong, up by 22 per cent on the same month last year, and are now 2.5 per cent up on the 2022 year-to-date, according to the Tractor and Machinery Association of Australia.

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“This is a particularly strong result given the rush of buyers that occurred in June, keen to maximise use of the Federal Government’s Temporary Full Expensing Program,” the association said in its monthly update.

“As we have been reporting for some months now, the industry’s ability to deliver tractors in such large quantities is due to the regular forward ordering that has been occurring for two years now in anticipation of supply challenges.

“The fact remains that if a farmer wants a specific ‘bespoke’ tractor ordered from the factory then delivery will be at least 12 months, indeed most dealers now are resisting taking forward orders because of the uncertainty surrounding supply combined with the price movements that are beginning to occur across the board.”

The report said it was unlikely “this incredible upswing” would continue.

"With tractor sales running at around 50 per cent ahead of what has traditionally been seen as a great year, there is no doubt that this can’t continue,” the report said.

“Delays in supply have served to smooth out the peaks in the market but we are beginning to see signs of when the current boom might end.

“Ownership costs are rising steadily with both purchase prices and financing costs rising steadily and the current tax incentives are in their final year.”

The association said this could be a big challenge for dealers who, having ordered machines 12 to 18 months earlier, may finally have them turn up during a period of weakened demand.

Sales results were strong across the board. NSW sales were up eight per cent, just one per cent behind last year; and Victoria was 24 per cent up on last August, due mainly to supply of small horsepower units, and is now up three per cent on last year.

The association said in the performance reporting categories, the small under 40hp (30kW) category was strongly up 25 per cent to be 10 per cent ahead YTD. The 40 to 100hp (30-75kW) range was up 21 per cent in the month to remain four per cent ahead YTD and the 100 to 200hp (75-150 kW) category was up again, seven per cent ahead in August to be four per cent behind YTD.

The large 200hp (150kW) plus range was the standout for the month, 55 per cent ahead of the same month last year but still one per cent off YTD.

“Combine harvester sales are ramping up in preparation for this year’s harvest and are now 19 per cent ahead of the same time last year,” the association said.

“There is every expectation of another 1000-plus year (of sales) for this product as the renewal of fleets occurs in anticipation of another bumper harvest.”

The association said baler sales had slowed through winter and were now down 19 per cent compared with last year, and sales of out-front mowers finished down again by three per cent.