Ag machinery market correction hits after boom

The new machinery market is in a state of correction following recent boom years, according to data released this week.

Sales of new agricultural tractors fell again during August, with just 750 units sold, 21% less than the same month last year.

The Tractor and Machinery Association of Australia (TMAA) released the figures on Monday, which brings the year-to-date position to be 28% behind (16% behind in dollar terms) the corresponding period.

In the association's report of the figures, it explained there were now two full months of data not impacted by the Federal Government’s Temporary Full Expensing Program, which ended in June 2023, and the picture is now quite clear that the market is in a state of correction following the recent boom period.

"Dealers are reporting a healthy level of enquiry from the market but there appears to be a lack of urgency on behalf of the buyer," the report read.

"This should be no surprise given the high levels of inventory in yards and an absence of any further incentives to buy now.

"Astute purchasers will be aware that deals are there to be done if they aren’t in a hurry and suppliers are responding with improved pricing and discounted interest rate terms.

"On this basis our expectations for full year sales are now around the 10,000 unit’s mark."

Looking at the state-by-state picture all states were down, Queensland was behind by 27% against the same month last year to be 24% behind year to date, Victoria was also down, this month by 10% to be 23% below last year.  

NSW was down 21% and remains 35% behind for the year while Western Australia reported a big drop of 31% to be down 16% compared with the same time last year. 

South Australia had another decline, off 8%, now down 30% YTD, Tasmania was off 30% for the month with sales in the NT finishing 29% down.

"Sales in each of the reporting categories were well off this month except for the 100 to 200hp (75-150 kw) category, which enjoyed a rise of 12% for the month, but remains 25% down year to date," the report read.

"The small under 40 hp (30kw) category was down by 37% to be 24% behind year to date. The 40 to 100hp (30-75kw) range was down again, this time by 29% and is now behind 38% year to date and finally, the 200 hp (150kw) PLUS range was 24% down compared to the same month last year and is now 12% behind year to date."

Sales of Combine Harvesters in advance of this year’s season have now reportedly begun however, the report revealed only about half the number of units have sold thus far in 2024.

"While another solid harvest season is expected there is no doubt that many growers will be well stocked with machines given the tax benefits of buying during the last few years," it read.

Baler sales continue their upturn, this time up 11% for the month but remain 13% behind year to date. Finally, sales of Out – Front Mowers were down by around 15% in the month.