New tractor sales for the March quarter reveal that the under 40 horsepower market, usually related to hobby and lifestyle farming, has taken a large slide. Source: The Weekly Times
The market is down 17% from last year for the March quarter, and 24% for the month of March.
Given the dry conditions around Victoria and Tasmania, this will come as no surprise as there is little need for grass and clearance control in the hotter months.
Most of these tractors are sold with mower decks or small slashers and are used by tree changers and lifestyle farmers on the fringes of the metropolitan areas.
Local governments are also large users of these tractors, so with dry conditions, often these purchases can be pushed out until the need is required.
This market is very hard to predict as it relies more on climate and off-farm income rather than the staples of commodity prices and input costs.
This is an important market for many brands and has in previous years represented large numbers – as high as 3500 units in an 11,000 unit total market – and one that is fiercely competitive as pricing as local dealers vie for the business.
Conversely, higher horsepower still remains in demand with large increases in 100-200 horsepower and 200+ horsepower tractors up 16% each for the quarter as the planting season approaches.
NSW tractor sales are up 14% for the quarter and Queensland up 2%, which is encouraging and a sign of confidence in those states.
Victorian new sales are down 6%, South Australia 6% while Tasmania and WA remain steady.
Nationally, new tractors sales are up 2% on what was a good year in 2015 and points towards an overall confidence in agriculture in Australia.
Most dealers are reporting good sales of used tractors. This means they are ready to take trades on new sales, keeping trade prices healthy.
Overall this points to a decent start to the year in most markets around the country.
The story is not so good offshore. New Zealand tractor sales are suffering from a depressed milk price with national tractor sales down 10%.
The US is down 10-15% from last year, which was also a poor year for sales.
Europe is stagnant and in various states of ups and downs depending on the country and exposure to different commodities.
Australia is a shining light for overseas factories, although we only account for 4% of the global marketplace. It is this fact that is keeping a lid on imported machine prices. Keeping the factories turning is the old adage that will make Australia a competitive market.