Agricultural machinery demand continues to be buoyant
4 May 2021
Growing demand for agricultural machinery and equipment has kicked 2021 off to fantastic start, according to the Tractor and Machinery Association of New Zealand.
The momentum began to build during spring and summer of 2020 as the result of increasing customer confidence, said TAMA president Kyle Baxter.
Mr Baxter said he was seeing and hearing first-hand how strengthened commodity prices were giving farmers and rural contractors the confidence to invest in new equipment.
Overall tractor sales were up more than 19 percent for the first quarter (to March 31) compared to 2020. There had been increases across every horsepower sector, with some stand out results in certain sectors such as a 30% increase in the sub 40HP sector plus a nearly 60% increase in the predominantly cropping and contracting segments of 150HP-plus.
Investment in the 40Hp-150HP sector, which represents mainly horticulture and dairy, experienced a more modest growth of 8%, but this could increase quickly as new equipment arrived in the country, Mr Baxter said.
Border control issues were a continuing challenge, however, affecting both the supply of staff and of equipment.
“The current border restrictions have left many TAMA members short-staffed and this is extremely stressful for individual members, staff and customers. We know of course we are not alone in this problem as it’s affecting most industries. As we look to the second half of 2021, with vaccinations and digital travel passports becoming more prevalent, we are hopeful of border control relaxations to assist with the flow of skilled staff for our members.”
Continued inbound and outbound supply chain challenges were also impacting members but conditions were on the improve.
“Global manufacturing constraints are still very much a reality, as plants continue to work through Covid restrictions in their respective countries, but the flow of equipment into New Zealand is increasing steadily. This will offer much welcome relief for customers who are requiring new pieces of equipment to be put to work straight away.
“TAMA members who manufacture in New Zealand are enjoying continued growth in customer confidence and strong demand for their equipment but are also experiencing issues in fulfilling their export market orders due to global shipping constraints.”
From a finance point of view, conditions were positive for the sector with the combination of strengthened confidence and commodities resulting in the big lending institutions looking favourably at the agricultural industry.
“This appetite to lend into agriculture will certainly help continue stimulate the sector further as we go into the 2021 season.”
Tractor industry remains optimistic for 2021
18 January 2021
The tractor sales industry finished 2020 on a strong note with December sales up 18.4 % on 2019.
Tractor and Machinery Association (TAMA) president Kyle Baxter says that while 2020 definitely posed challenges for the industry, the current mood of members is positive.
Overall tractor sales for 2020 were down 15.3% compared with 2019, with sales for the bigger machines (375+ HP) particularly affected with a drop of 25%.
Mr Baxter says nobody in the industry was surprised with the reduction in sales for the high-end tractor investments: “Tractor distribution companies had been envisaging a reduction in sales going into 2020, however, as a result of the pandemic sales reduced slightly more than expected.”
Certain HP sectors actually remained stronger than others over the year, particularly lifestyle tractors (20-30HP) for which sales volumes were very similar to 2019. Tractors sold in the viticulture and horticulture segments (80-100HP) also bolstered annual sales volumes with a reduction of only about 5% compared to 2019’s record breaking year. Harder hit was the higher horsepower tractor segment traditionally sold into the arable / cropping and dry stock farming sector (140 -375 HP), with about a 20% reduction in sales volume from 2019.
“This HP segment accounts for a lot of the tractors sold into contractors and hire fleets, which were affected by the general uncertainties around the pandemic. They also experienced further uncertainty in obtaining sufficient workers through the spring and summer season to operate these machines, with a consequential reduction in the yearly sales volumes of larger tractors.”
TAMA members are now reporting that demand for tractors and equipment is steadily building across the country, as customers are beginning to secure their machines for spring / summer 2021.
“However, the pandemic is continuing to disrupt the overseas supply chain across Europe, America and Asia. While New Zealand TAMA members are doing everything they can to ensure machines arrive on time for the season ahead, there will be potential delays in global manufacturing and international shipping routes that could be felt during the first half of the year.”
Mr Baxter has advised TAMA members to stay well informed of any shipping delays via their overseas manufacturers and shipping companies, and to liaise with their customers who may be affected by these delays.
“On a positive note for 2021, our members who manufacturer within New Zealand are reporting strong order banks for their equipment from customers. This is very good news and another sign that our primary industry is still feeling buoyant amongst the global turmoil.”
For more information contact:
Kyle Baxter, President TAMA
027 670 7585
About the Tractor and Machinery Association of NZ
The Tractor and Machinery Association of NZ (TAMA) is the industry representative for New Zealand’s commercial tractor and machinery industry, including importers, manufacturers and retailers. TAMA obtains retail delivery statistics for around 97% of the tractor market and about 80% of the machinery sector from its co-operating members. Visit www.tama.org.nz.