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 Tractor sales shrug economic gloom 

Tractor sales shrug economic gloom

19 May, 2009 10:10 AM
AUSTRALIAN lobby group the Tractor and Machinery Association's Vin Delahunty maintains agriculture's mood remains "upbeat" and that the general signs for this country's farm machinery industry remain "strongly positive", thereby bucking the trend associated with the embattled car industry.

A remarkable 12,000 modern-day beasts of burden were sold across Australia during the last 12 months, principally on the back of an easing in the drought (see graph).

But the early sales indicators for 2009 suggest farmers already are on track to replicate these figures as they shrug the financial gloom that hangs over much of the Australian economy.

Mr Delahunty sheets home the continuously bullish look to tractor sales by pointing to the latest industry data which has the market 7.7 percent up for the first four months of 2009, compared to the same period last year, with the month of April up a staggering 16 percent over the same month last year.

* Rural Press's Machinery Annual, will appear in this Thursday's weekly agricultural newspapers.

Even more remarkable is that further analysis of the ['09 April tractor sales figures has them running some 40 percent higher than the levels recorded when the same month over the past five years is compared.

At 4065 unit sales, this is the best start to the year the industry has had since 1985 with the strength in the market focusing on the 0-40pto hp, 60-100hp and 140hp-plus segments where sales have lifted by 10 percent, 11 percent and 14 percent respectively.

There's no denying how the drought's receding tentacles across wide swathes of Australia has played its part in re-invigorating farm machinery industry which, during 2008, managed sales achievements not be seen for the past 25 years.

"It looks like that bounce has remained within the industry (this year)," Mr Delahunty said.

Stand-out reasons for farmers continuing to purchase new machinery centre on:

• Good seasonal conditions across northern Australia leading to a welcome summer crop harvest.

• A hard core of farmers maintaining their capital investment programmes in a bid to keep abreast of the latest technology.

• The proposed Federal Government business tax break for equipment purchases which will only be available to farmers who order by June 30.

It's a far cry from some 18 months ago when the industry was all but on its knees due to a run of poor seasons with the remainder of 2009 on track to capitalise on its '08 sales success.

"All the early ordering indicators are apparently very good," Mr Delahunty said.

"We are expecting sales to maintain and improve for tillage and seeding (products), plus the farm sprayer sector, too.

"As well, the demand for hay and silage-type products looks as though it might be strong again, depending on the season."

Interestingly, the TMA notes that while finance companies may have "galloped out of the motor industry", they continue to maintain their presence in agriculture.

"There are some fantastic opportunities about and that's not hurting machinery sales either," Mr Delahunty said.

"Agriculture and its customer base are recognised as reliable places for investing."

Less certain, however, are the implications stemming from the slow-down of the northern hemisphere economies, particularly Europe and North America.

The suggestion is that lacklustre demand will make it easier for Australian farmers to access product – a top-of-mind issue during the past 12 months.

The heat also has come off steel and oil prices which, in turn affects the price of plastic – a component that plays a big part in the make-up of a modern day sprayer.

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The Australian tractor market has not experienced this level of sustained growth since our records began in 1979.
The Australian tractor market has not experienced this level of sustained growth since our records began in 1979.
“All the early ordering indicators are apparently very good, the TMA’s Vin Delahunty.
“All the early ordering indicators are apparently very good," the TMA’s Vin Delahunty.
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