THERE’S no doubt the previous decade has been tough to Mallee farm machinery dealers.
The decade-long drought hit local dealerships equally as hard as the growers, with a lack of income meaning there was little opportunity to upgrade farm equipment.
However, the past two years have been much kinder to growers, and dealers in the Mallee are beginning to see their sales head in the right direction.
Dennis O’Connor, chief executive with O’Connors Case IH, which has dealerships at Birchip, Warracknabeal and Horsham in western Victoria, along with Shepparton in the Goulburn Valley and Corowa in the Riverina, said sales had hit record levels in 2011.
He said his business had sold $34 million worth of business in the last year.
Harvesters have been a strong seller of late, with Mr O’Connor saying growers were looking to ensure they had access to a header when they needed it, given the trend of harvest rain impacting on crop quality in recent years.
Mr O’Connor said he had been speaking with clients across the Wimmera-Mallee in the past week, and said the situation had changed markedly in the past fortnight.
“It’s gone from not being that flash to now looking pretty good in most parts, obviously some spring rain will be needed, but there’s some optimism out there, especially in light of the good grain prices.”
Mr O’Connor said it was unlikely to translate into another calendar year of record sales, but would translate into better sales moving into 2013.
He said there was a slow start to this year, as farmers battled lower prices and then the late break, but said the transformation to both the key factors in decision making, current crop potential and grain prices was a big plus.
Meanwhile, the Tractor and Machinery Association (TMA) has said the changes following deregulation have led to a change in purchasing trends in farm machinery.
The end of the single desk for wheat marketing and a big increase in investment in on-farm storage have given farmers greater autonomy when it comes to deciding when to buy and sell equipment., according to TMA executive director Richard Lewis, in particular big ticket items, such as headers.
"There used to be a rhythm to the year. The first payment for each pool was a large lump of the forecast price and it was made them pretty well straight after harvest," he said.
"There was a dump of cash into farmers' pockets early in the year.
"That's when they thought about ordering a new header for the following harvest. The machinery industry knew the ordering season would be on and had their programs in place.
Mr Lewis said nowadays cash flow was more evenly spread and buying patterns were different.
"The row of silos out the back is almost like an on-farm ATM - they just sell off a few loads whenever they need some cash," he said.
"Apart from changing cash flow patterns I think there's also less certainty about the final value of a harvest and that's also leading to a delay in big purchase decisions.
"A header was usually financed on annual after harvest payments but that's no longer the norm," he said.
"Repayments now tend to be more frequent to match cash flows from grain."
Agriview's Alan Kirsten, who has been analysing TMA sales figures for many years, said the data confirmed that machinery buying patterns were becoming more spread out.
"The wheat marketing changes have had an effect. It's still shaking out and the next couple of years will give us a clearer picture. However, I think the industry will have to adjust to more second-half ordering activity," he said.
