Tractor and machinery sales tell of farmer fortunes

Overall, national tractor sales in the first 10 months of this calendar year are down a little over 10 per cent but Victoria's are down only 3pc for the same period last year, says Agriview managing director Alan Kirsten.

The under 40 horsepower compact tractors favoured by lifestyle farmers were down 5.6pc.

About 40pc of the tractor market was under 40hp, Mr Kirsten said, with the remainder sold into agriculture.

The 40-100hp range fell 9.6pc, the 100-200hp range is up 2.3pc and tractors over 200hp were up 3.6pc.

"Victoria's one of the few states that, together with WA, have grown in that broadacre range," Mr Kirsten said.

"Overall, the Goulburn and north-east region's up a little bit, just over 1.5pc."

"The Mallee-Loddon areas are up 4pc, the Wimmera's up 19pc, thank you for the rain.

"Gippsland's off 17.6pc, Melbourne, which goes down the Peninsula, is off by 6pc, western Victoria is up 3.7pc.

"Where the rain is, there's confidence."

Sales to the dairy sector had been somewhat misleading.

"Dairy farmers were buying, even up to a couple of years ago, because it was cheaper to, and it still is today, move out of a not-very-old machine into a newer machine for less money," Mr Kirsten said.

"They're conserving their cash.

"There's been a lot re-equipping in that sector because of those low finance deals but I think that has slowed from a tractor point of view."

The retail pricing of machinery was yet to be affected by the falling Australian dollar.

"High levels of inventory in the marketplace have offset the weakening of the Australian dollar," Mr Kirsten said.

"Inventory is still a little bit on the high side, but it's working its way down so, I think by the time we go into next year, it'll be in a much better place."

Even so, Mr Kirsten expects retail tractor prices not to go up next year.

"It'll probably be the year after," he said.

"I wouldn't suggest that that will happen next year, notwithstanding exchange rates.

"There is still good deals to be had, particularly in the low finance rate environment."

Mr Kirsten said Victoria's combine market had "held up pretty well", down just under 10pc, whereas New South Wales was down 45pc year-on-year.

Balers were up 36pc in Victoria.

"We're seeing big square balers that normally you'd sell into the export oaten hay market become part of the mix in broadacre," Mr Kirsten said.

The consolidation of smaller farms was being reflected in the changing shape of the Australian tractor market.

"That 40-100hp market's shrinking a little bit because you're finding that farms are getting bigger, growing the demand for higher horsepower machinery," Mr Kirsten said.

"A farmer that 15 or 20 years ago might have had 80hp is up to 110hp.

"If you're up to 80-100, you're moving into 100-140hp.

"It goes right through.

"Buyers at 100-140 are now going into the 140 to 200.

"I'm using broad breaks but that's how the market seems to work."

There has been similar consolidation of tractor dealerships.

"The number of dealer outlets now is is around 650 - that is very small - 30 years ago, we had 2500 outlets," Mr Kirsten said.

"The 650 outlets are owned by about 340 businesses."