Tractor drought on horizon

Tractor Machinery Association launch state of industry report


On Farm
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Tractor Machinery Association launch the state of industry report at annual conference.

MACHINERY manufactures and dealers gathered in Sydney last month for the annual Tractor and Machinery Association (TMA) conference. 

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SALES FORECAST: Agriview owner, Alan Kirsten launches the Tractor and Machinery Association's state of the industry report at the TMA annual conference.

SALES FORECAST: Agriview owner, Alan Kirsten launches the Tractor and Machinery Association's state of the industry report at the TMA annual conference.

About 150 attendees heard from analysts, experts and industry leaders about what the sector could expect over the short and longer term, with a particular focus on how the industry could thrive in the face of oncoming disruption.

Agriview owner, Alan Kirsten said notwithstanding peaks and troughs, sales figures for tractors above 45 kilowatt (60 horsepower) of power had steadily increased over the past decade, however he predicted an on-coming slump. 

“The net farm cash income, the money they have to spend, has been rising, that has fuelled a lot of investment,” he said.

“My concern is we are about to drop, we’ve just had our driest financial year on record, that’s got to take a toll.”

We’ve just had our driest financial year on record, that’s got to take a toll - Alan Kirsten

Mr Kirsten said decreased farm income, coupled with previous high sales, factored into his forecast. 

“We’ve sold more tractors in the past ten years then we’ve had in thirty,” he said. 

“We don’t have the number of customers we had, we don’t have the land.

“The machinery we are offering is more efficient, more specialised, there is a point where we have an absorption problem.

Mr Kirsten said while he didn’t believe the slow down would mimic the 1990s, where tractor sales dropped to 5000 a year, it would slow. 

“We can’t keep pumping the pipeline,” he said.

“I think it will start to slow.

“You have to be prepared, while the market has been pretty good for ten years, it won’t last.

“We’ve gone into the year with very little ground moisture, a mouse plague in some cropping areas and frosts affecting people who have tried sowing two or three times.

“All the feed has gone, its headed north,  so we can’t get a crop out and we can’t bale anything for fodder. 

“We had the driest and highest temperature anomalies on record.

“So I think this is a drought we are underestimating.”

Mr Kirsten said backing up his forecast, the last four years had shown unprecedented positive market sales.

“We don’t do four years in a row of positive market conditions,” he said. 

Mr Kirsten said the under 45kW (60hp) market, known as the leisure market, was unlikely to have much more then a small correction. 

“The leisure market is less volatile,” he said. 

“Whereas the corrections in the agriculture space are higher.”

Mr Kirsten said he predicted header sales for this year were likely to be about 760, which was close to the five year average.

“We will start to see a slowing in demand – it is masked by the lead time,” he said

The story Tractor drought on horizon first appeared on Farm Online.

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