New tractor sales continued to boom in May, jumping 30 per cent year-on-year as farmers responded positively to recent rain and a major lift in the instant tax write-off for purchases of machinery.
Executive director of the Tractor and Machinery Association, Gary Northover, said for the third month in a row tractor sales had lifted significantly across most of Australia.
He said the sales growth had been driven by much improved weather prospects and the Federal Government's decision to lift the instant asset write-off scheme from $30,000 to $150,000 in response to COVID 19 pandemic.
Victoria was again a hotspot for sales with a 32pc rise compared with May last year and was now up 24pc for 2020.
Sales in NSW rose 38pc for the month and were now running 12pc higher for the year to date, Mr Northover said.
Queensland had another strong month rising 34pc which had pushed sales 10pc ahead of this time last year, he said.
South Australia's sales grew 13pc during the month and were now 16pc ahead of last year while Tasmania reported another strong month and was now 21pc ahead of 2019.
West Australia enjoyed the first positive month for a while with a 7pc increase but sales were still 11pc down year-to-date.
"With three consecutive months of above average sales the industry has resumed a level of activity that will give some comfort to dealers after what has been a torrid two -year period," Mr Northover said.
"The news on the weather front keeps getting better and demand for commodities remains extremely strong despite some trade tensions with China."
Canberra has now extended the instant asset write-off program from June 30 to December 31.
"Any extensions will need to be managed in the context of challenges with supply as previously reported," Mr Northover said.
"While factories across the world have started re-opening, the supply pipeline will take time to replenish and the full impact of this will play out over the coming months.
"Turning our attention to the horsepower demand, the 100 to 200hp (75-150kw) category leads the way with another strong month, up 60pc in May and 31pc year-to-date.
"The strength in the horticultural space is having a big impact on demand for this range, strongly supported by the financial incentives in place.
"The under 40hp (30kw) range was up 16pc for the month and now sits 5.6pc ahead for the year to date.
"The 40 to 100hp (30-75kw) range was again up strongly by 39pc was now 9pc ahead for the year while the 200hp (150kw) and above range dipped 13pc for the month and is now 7pc behind the year to date," Mr Northover said.
Meanwhile, sales of combine harvesters have effectively stalled with very few sales in May.
"While there continue to be encouraging signs of a return to grain planting activity, which will ultimately lead to harvesting, meaningful demand for new harvesters is still a fair way off," he said.
"Baler sales continue to be very strong up 10pc year to date while sales of out-front mowers dipped but remain 16pc ahead of the same time last year."
Vernon Graham
Former editor of The Land, former Fairfax Media Agricultural Editor
Former editor of The Land, former Fairfax Media Agricultural Editor
