WORDS such as “steady”, “soften” and “slightly” are being used to describe tractor sales this month, but as of yet, no sign of the word “slump”.
It’s not surprising given the strong year to date sales figures, tractor sales are likely to slow over the remaining quarter, with a reduced harvest forecast and some market segment saturation also affecting the market.
Tractor and Machinery Association of Australia, executive director, Gary Northover said while September sales figures were up in some segments, overall tractor sales were only steady.
“It would appear that the steam is beginning to run out for sales of agricultural equipment across Australia with sales steadying and sentiment beginning to soften,” he said.
It would appear that the steam is beginning to run out for sales of agricultural equipment across Australia
“It is clear that the various, well publicised weather events that have been occurring across the country are now having an impact as expectations for another record season have been well and truly dampened.”
Mr Northover said overall tractor sales in September were in line with the previous month and about 10 per cent ahead on a year to date basis.
This was, he said, primarily driven in the 75-150 kilowatt category, which was up 17pc in September and ahead 13pc on year to date figures.
“This segment seems to be driven by activity in the dairy sector where interest in this size range has been strong for some time,” he said.
The 30-75kW category remained in line with the previous months sales figures, while the less than 30kW segment dropped slightly, though year to date figures remained strong, Mr Northover said.
“It is in this segment more generally that a level of saturation may finally be occurring,” he said.
“Whilst the fundamentals underpinning this market, known as the leisure market, are still strong, buying activity has been hectic for some time and some in the industry are suggesting that a temporary lull may be occurring.”
Tractors powered above 150kW remained in line with the previous months sales figures and slightly up on last year, said Mr Northover.
Queensland and South Australia sales figures were the strongest with 12pc and 30pc monthly increases respectively.
“New South Wales was steady, reflecting the variable weather conditions being experienced there and after a slow start and some late rain, Western Australian sales bounced up slightly on last month,” Mr Northover said.
Mr Northover said while header sales had been healthy, up 20pc on the previous month and 30pc on 2016, there were now signs that header sales have slowed on the back of a lower projected harvest.
Undermining this position is a lack of optimism for further ex-stock orders and a cloud over expected forward orders that will need to be placed in the coming months
“Undermining this position is a lack of optimism for further ex-stock orders and a cloud over expected forward orders that will need to be placed in the coming months,” he said.
“This will impact next year’s figures considerably.”
Mr Northover said baler sales were broadly in line with the previous month and 15pc up on last year.
“Whilst we are seeing a reduction in demand for agricultural equipment, this is off what was a record 2016 year with many feeling that we are at more manageable levels,” he said.
The Tractor and Machinery Association of Australia is a member based industry organisation that represents the interests and development of importers, manufacturers and sellers of agricultural tractors and machinery in Australia.