Agricultural equipment sector remains positive
20 October 2020
The agricultural equipment sector remains in a positive mood throughout the country says the Tractor and Machinery Association (TAMA), which represents the sector in manufacturing, retailing and distribution.
TAMA sales statistics for the year to date (September 30) are down around 18 percent compared with 2019‘s record-breaking year, however indicators remain positive as New Zealand enters the peak of another growing season.
TAMA president Kyle Baxter said despite sales volumes being down in some equipment ranges, members were confident regarding business trading across dealerships and local equipment manufacturing.
Customers were already discussing their machine requirements for autumn and spring 2021, which was a really encouraging sign, Mr Baxter said.
“Everyone has benefited from a mostly favourable winter around the country. This weather was greatly appreciated by many customers in a year that has seen a never-ending list of challenges.”
Mr Baxter said one big challenge still facing TAMA members was the continuation of international border restrictions.
“Many TAMA members rely on overseas staff to fulfil a broad range of roles within dealerships, manufacturing and technical support roles. With these roles not being able to be filled from overseas during the season, and possibly beyond, TAMA is urging its members to look at other options available.”
These options included COVID-19 government funding for businesses who take on new apprentices or retrain unemployed people from other sectors.
The TAMA triennial employment survey, which came out in August, showed that the industry had 318 apprentices but needed 176 more. The survey also showed that around 25% of the workforce could likely retire in the next 15 years while only 32% of staff are aged under 30.
“We want to attract more under 30s into our industry to help ensure sound succession planning. Given the huge uptake and integration of new technology into our sector, the job opportunities continue to develop as quickly as the technology.
“It is hugely encouraging to hear from members who have had successes with the new apprenticeship funding and I am positive that this success will continue into 2021 and beyond.”
8 May 2020
Tractor sales down 60%: TAMA calling on Government to help save its sector
The Tractor and Farm Machinery Association (TAMA) is calling on the Government to take urgent measures to help its sector in the face of plummeting sales.
TAMA President John Tulloch has written to the Minister of Agriculture Damien O’Connor requesting action to encourage farmers and contractors to invest in farm productivity this year.
Specifically, TAMA wants the Government to review its low value asset write-off limit to bring it up to at least same level as Australia. The New Zealand Government has temporarily increased the threshold to $5,000 because of COVID-19 however the new Australian limit is $150,000.
“$5,000 is far too low to assist the primary sector, where a new tractor can cost upwards of $100,000,” Mr Tulloch said.
The Minister recently stated that the Government was looking to the primary industry to help the economy recover from the pandemic fallout.
“However, our sector, despite literally keeping the primary industry moving, is facing job losses and business losses. We could see a repeat of the GFC crash that took us years to recover from.”
COVID-19 is negatively affecting contractors’ and farmers’ income, many of whom are also dealing with drought impacts. This is turn is affecting their ability to invest in farm machinery and equipment. April tractor sales were down more than 60% from April 2019 and without intervention this could be the sector’s “new normal”.
“We will see flow-on effects such as the loss of competition within our sector plus barriers to farmers maintaining and obtaining tractors and machinery.”
The New Zealand tractor and farm machinery sector is worth about $1.3 billion annually and provides 2500 jobs. In 2018 and 2019 sales were finally back to the 2005 and 2006 annual tractor sales of more than 4000. The GFC crisis saw sales plummet by 45%. It took the sector eight years to recover.
“If our sector declines by 45% again it means the potential for the loss of 1200 jobs, within the primary industry that already needs 50,000 more workers. We are already facing a severe financial pinch through the postponement of the June face-to-face Fieldays where we receive a bulk of our orders.
“We need urgent action from the Government now to enable our primary industry to keep investing in its future. Otherwise the country will feel more pain later.”
TAMA awards inaugural scholarships amid worker shortage
29 April 2020
The Tractor and Machinery Association (TAMA) has awarded two inaugural scholarships as part of its moves to attract, retain and reward skilled workers.
The annual scholarships come at a time when the primary industry is in great need of more workers. In October last year Agriculture Minister Damien O’Connor said it was estimated the sector needed another 50,000 workers by 2025 and over 92,000 more workers with qualifications.
TAMA general manager Ron Gall said this need was even greater now as the primary industry had a major role in helping our economy recover from the COVID19 pandemic fallout.
“Anything we can do as a sector to attract or retain workers is a step forward. Our industry needs people for a wide range jobs, including working with sophisticated technology and robotics.”
The two scholarships were available to tractor and machinery industry trainees who are studying towards a certificate or diploma.
One was awarded to Alice Stanbra, a parts and automotive accessories apprentice for Norwood Manawatu. Alice said she would use the opportunity to undertake further training for management qualifications after the completion of her apprenticeship.
The other was given to Regan Bailey who is about to start the third year of his agricultural diesel apprenticeship with Tulloch Farm Machines in Masterton. Regan said the scholarship would give him “the confidence to continue to work hard and strive for success and knowing I have the support and backing from such an important association in our industry will give me added incentive to succeed.”
Ron said like every other industry in New Zealand, the primary industry was facing a period of great change after the pandemic crisis ended.
“The Government has indicated that it would be looking at how to build off the strengths of the primary sector such as increasing the onshore processing of goods. However, that can only happen if we have the skilled workers in place.”
2019 a solid year for tractor and machinery sales but 2020 brings uncertainty
17 March 2020
Tractor and farm machinery sales were down on 2019 compared to 2018 but hopefully 2020 will see previously deferred purchase decisions realised, says Tractor and Machinery Association (TAMA) president John Tulloch.
TAMA statistics showed that during 2019, overall machinery sales were 4382 units compared to 4531 of all types sold in 2018.
Mr Tulloch said as these units included everything from $1000 sprayers through $500,000 harvesters, it was more useful for meaningful comparisons to focus on the key machinery areas of grass and forage harvesting. These sales were 1787 units in 2018 compared to 1665 units last year: a decline of about 6.8%. In turn there were 4007 tractor sales in 2019 compared to 4640 in 2018, a drop of 13.6%.
“Anything over 4000 tractor units is still a respectable result and showed we had a pretty solid year. And certainly within the machinery sector, we had a better year than many were expecting considering the conditions.”
These conditions included uncertainties around government policy on water quality and emissions plus challenges in obtaining finance as banks beefed up their equity reserves.
2020 was also shaping up to be another year of uncertainty with the unknown effects of the coronavirus and a general election. COVID19 could affect buyer confidence and there may be some impact on sourcing components from China although this had not yet occurred.
“We just don’t know the actual impact yet. It could end up being positive as New Zealand is known as a safe country for food production. We have stringent and well-recognised food safety systems so could be seen as a preferred supplier. But only time will tell.”
Mr Tulloch said the North Island drought conditions would have an effect on farmers although contractors might have a good season as feed reserves have been used up, requiring restocking. Farmers in Westland, Southland and Otago were also suffering after a wet, cold spring followed by summer flooding.
“The reduction in value of dairy company shares is also suppressing the mood and sentiment of dairy farmers even though the predicted payout of $7+ is still quite positive.”
With all these factors it was hard to forecast how the tractor and farm machinery industry would fare by year end, he said.
“I would like to think that this coming season might give us a slight increase because some farmers and contractors have deferred purchasing so there’s some pent-up demand to realise.
“Many are saying ‘let’s wait and see’ but by the time they decide it could be too late to purchase in 2020.
“Factory lead times are becoming longer as the machinery becomes more complex and technical. People need to order much earlier now to ensure their order can be imported in time so it’s important they make the buying decision sooner not later.”