Friday, 21 May 2021 08:55

Ag machinery demand buoyant

Written by  Mark Daniel
TAMA president Kyle Baxter says strengthened commodity prices are giving farmers and rural contractors more confidence to invest in new equipment. TAMA president Kyle Baxter says strengthened commodity prices are giving farmers and rural contractors more confidence to invest in new equipment.

Demand for agricultural machinery and equipment has kicked 2021 off to a fantastic start, following the momentum that built during spring and summer of 2020.

The Tractor and Machinery Association of New Zealand (TAMA) is reporting that tractor sales increased by more than 19% across all horespower sectors for the first quarter - compared to 2020. There was a notable 30% increase in the sub-40hp sector and a near 60% increase in the 150hp-plus sector.

In the 40hp-150hp sector, which covers horticulture and dairy, growth was a more modest 8%. However, this could increase quickly as new equipment arrives in the country.

TAMA president, Kyle Baxter says he's seeing first-hand how strengthened commodity prices are giving farmers and rural contractors more confidence to invest in new equipment. However, border control issues are a continuing challenge, affecting both the supply of staff and equipment.

"Current border restrictions have left many TAMA members short-staffed," Baxter says.

"We're looking forward to the second half of 2021, with vaccinations and digital travel passports becoming more prevalent, hopefully allowing a relaxation of border controls to assist with the flow of skilled staff to our members."

He adds that continuing supply chain 'challenges' are also impacting members.

"Global manufacturing constraints are still a reality, as plants continue to work through local Covid restrictions, but the flow of equipment into New Zealand is increasing steadily," Baxter says.

"TAMA members who manufacture in New Zealand are reporting growth in customer confidence and a strong demand for their equipment. But, on the flip-side, they are experiencing issues with fulfilling orders for export due to global shipping constraints."

From a finance point of view, Baxter says the combination of strengthened confidence and commodity prices is resulting in the lending institutions looking favourably at the agricultural industry.

"This appetite to lend to agriculture will certainly help continue to stimulate the sector further as we go into the 2021 season."

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