31 October 2018
Tractor and farm machinery sales on track to set record
Sales of tractors are up 17% on this time last year and could set a record by year-end, says NZ Tractor and Machinery Association (TAMA) president, John Tulloch.
TAMA year-to-date figures to the end of September showed a total of 3355 retail sales across all HP (horsepower) categories compared to 2865 in 2017.
Mr Tulloch said there was, advisedly, a cautionary approach to spending in the industry but despite that, sales could hit a 4500 calendar year record. The reduced Fonterra forecast of between $6.25 to $6.50 per kg of milk solids (down from $6.75) had “taken a bit of a shine off the optimism” in the dairy sector but demand here could increase during the European winter because of the summer drought. Mr Tulloch had recently visited Europe and was shocked at the effects of the drought.
“Some European dairy farmers will definitely have to sell stock because they can’t get or afford extra feed. I suspect that will translate into demand for our milk products.”
However, Europe was only one region in the world and it was wise for New Zealand dairy farmers to budget with ongoing caution, as recently advised by Fonterra Chief Executive, Miles Hurrell.
The sheep and beef sector was still buoyant and the drop in the New Zealand dollar would further assist this buoyancy. The horticulture and viticulture sectors were also looking confident.
However, Mr Tulloch said all sectors were also facing increased costs with high fuel prices and the currency drop. “You also can’t control the weather. Seeing the devastating effects in Europe, it reinforces the need for all of us in the New Zealand industry to be in a strong position to withstand adverse events.” For farmers, this meant being in a robust enough position to ride out unfavourable weather and/or market conditions.
It was also important that farmers supported their local farm contractors as this retained strength in the industry. In recent years some contractors, especially in the North Island, had received complaints regarding their prices and had faced deferred payment, meaning their business was put at risk, Mr Tulloch said. In some areas, contractors had actually been making a loss because prices had been driven so low. In addition, a new trend was emerging where contractors actually purchased crops before harvesting them then on selling. This new system created a further layer of risk for contractors.
“The contractor system is the most efficient use of machinery in the most cost effective way. If this system falls over then everyone loses. It’s important that the system is supported as it helps create resilience across the industry.
9 July 2018
Tractor sales up across all sectors
Sales of tractors are up more than 25% on this time last year and all sectors are showing buoyancy, says new NZ Tractor and Machinery Association (TAMA) president, John Tulloch.
TAMA year-to-date figures to the end of June showed a total of 1,876 sales across all HP categories compared to 1,448 in 2017: a total increase of 26.1%.
Mr Tulloch, who was elected at the Mystery Creek Fieldays in May, said sales were back at near 2014 levels, but instead of favouring agriculture as back then, there was also increased spending within the lifestyle, viticulture and horticulture markets.
“It’s rare to see every sector relatively buoyant at the same time. All the stars seem to be lining up so, bar a big shock, the outlook is definitely positive across the board.”
He said, however, agricultural customers were being cautiously optimistic rather than going on big spending spree. There were concerns about the regulatory framework on water use and emissions, and the impacts of mycoplasma bovis.
“But the main reason for cautious spending in this sector is a healthy scepticism learned the hard way around forecast payouts as they don’t always eventuate. Our sheep, beef and dairy export markets have all improved and while numbers of people attending Fieldays were up, most of our members reported that actual sales prospects were down. Farmers and contractors don’t want to over commit themselves financially and see a repeat of the 2015 downturn.”
Despite some caution, overall sales were looking very healthy and if the trajectory continued, tractor and machinery sales could possibly hit a new record high by the end of the year.
“We might be heading towards a record year but, like our customers, are being cautiously optimistic. As everyone well knows, we have no control over our climate and what it throws at us. But we’re hoping to see these numbers continue.”
2 February 2018
Farm machinery sales back to 2014 levels
Sales of tractors in 2017 had increased markedly, just topping the previous highest recorded levels of 2014, says NZ Tractor and Machinery Association (TAMA) General Manager, Ron Gall.
However, Mr Gall said the association recognised that some farmers in both islands were currently experiencing hardship with the very hot and dry conditions. The challenging drought conditions may affect sales in the coming months but it was hoped changing weather would provide some relief.
Mr Gall said in 2017, a total of 4079 tractors were sold. This is up 13% on 2016, up 14% on 2015 and even slightly up on the boom dairy year of 2014, which had 4062 sales.
Sales were particularly strong in the dairy areas of Waikato, Taranaki, Manawatu, Canterbury and Southland and in the horticulture, viticulture and arable areas of Northland, Hawkes Bay, Nelson and Marlborough.
Otago, home to dairy and horticulture and viticulture, experienced particularly impressive growth, with a 28% increase on 2016. The biggest increase on last year’s sales was Taranaki with 214 sales in 2017 compared to 158 in 2016, representing a 35% boost. Combined, the areas of North, Mid and South Canterbury had a 22% increase on 2016.
Mr Gall said the increased sales reflected the improved dairy forecast payout along with steady growth in horticulture and viticulture.
According to TAMA’s biennual industry value and employment survey, the total number of people employed in the tractor and farm machinery sales and servicing sector had also increased. There has been a 14% increase since 2015 – from 2492 to 2846 roles. Nearly 40% of those employed earned salaries of more than $75,000.
Of respondents to the survey, 57% said they had difficulties hiring staff and 19% had hired migrants.
“The machinery/technology sector offers innovative and well-paid jobs with a strong career pathway, including senior roles in sales and business management. TAMA is looking at options to profile the industry as a rewarding career choice for young people,” Mr Gall said.