Tuesday, 07 June 2016 15:55

No doom and gloom in tractor and machinery showrooms

Written by  Mark Daniel
TAMA president Mark Hamilton-Manns. TAMA president Mark Hamilton-Manns.

Farmers and contractors are still ready to spend on technology if it will save them money, says the New Zealand Tractor and Machinery Association (TAMA).

"NZ tractor sales are still relatively buoyant, despite the current dairy payout" says TAMA president Mark Hamilton-Manns.

TAMA obtains retail delivery statistics for 97% of the NZ tractor market, plus general agricultural machinery sales statistics from its co-operating members.

A look at how the industry is fairing shows it is not all doom and gloom. Commenting on first quarter results, Hamilton-Manns says sales figures are down 11% on 2015 numbers.

"While certain segments have enjoyed growth, the dairy sector (100-120hp) has seen a greater in decline in sales activity.

"We are seeing farming customers take longer to make decisions and are often electing to purchase a machine with a lower level of specification to meet a budgeted price point. In some cases cabs are a luxury removed from the shopping list."

Clearly some farmers are locked into a plant replacement cycle and often find that a new machine will reduce annual spending as repairs and maintenance generally cost less on a new machine and are often covered by warranty.

The 20-60hp compact utility segment in NZ has enjoyed around 15% growth as residential property owners look to replace aging tractors.

"We are seeing significant competition in this segment of the consumer market," says Hamilton-Manns. "These consumers spend a lot of time online and in store evaluation and research. But we stress that they should look at parts supply, service and warranty support. What could be a great deal could end up costing a great deal.

"The NZ tractor market is mirroring what is occurring in the US, where retail sales of under-40hp tractors were up 33.2% for March 2016 and increased 26.1% year-to-date. However, January-March sales of 4WD tractors fell by 38.2%."

The global commodity downturn is largely responsible for the decline in ag tractor sales. Perhaps the most telling statistic in a market dominated by corn, wheat and soybeans is that combine sales were down 14.7% for first-quarter 2016 versus last year.

In Europe similar trends are seen: overall tractor sales in 2015 declined by 3.4% (129,249 units in 2015 vs 133,857 units in 2014).

In an already depressed South American market, industry commentators have predicted sales of tractors and combines could fall by as much as 10-15%.

"At a time when our customers are reducing costs, most manufacturers TAMA represents are doing the opposite and investing in training, aftermarket support and parts supply to ensure our customer's machines keep operating," Hamilton-Manns says. "Moreover, our manufacturers are spending heavily on R&D to meet off-road emissions regulations, integrate technology into machines and reduce operating costs.

"New technology at National Fieldays will... if nothing else, send visitors away with new ideas or opportunities they can integrate into their businesses to achieve greater bottom line returns."

More like this

Positive signs, says McClay

First up to the podium at the recent Tractor and Machinery Association (TAMA) Conference in Wellington, Minster for Agriculture, Todd McClay, reflected on a difficult 12 months, but hinted at signs that things were turning the corner, saying “when ag does well, New Zealand does well”.

Time to cast the net past China

A 2022 Nuffield scholar, Lucie Douma, was brought up on a Southland dairy farm and as a hobby likes the risky business of trail running and ultra marathons.

Tractor, machinery sales dip

The recent Tractor and Machinery Association (TAMA) conference in Wellington was signalling cautious optimism on the back of rising milk and store cattle prices and drops in interest rates.

Changing of the guard at TAMA

Deere NZ territory manager Jaiden Drought was elected new president of the Tractor and Machinery Association (TAMA) at its August annual meeting.

Signs of life in Aussie farm machinery market

Following a couple of bumper sales years when the rolling year-to-date figure for 2022 hit about 16,250 tractors, it looks like things are changing in the Australian farm machinery landscape.

Featured

LIC Space folds for good

Farmer co-operative LIC has closed its satellite-backed pasture measurement platform – Space.

Editorial: Time for common sense

OPINION: The case of four Canterbury high country stations facing costly and complex consent hearing processes highlights the dilemma facing the farming sector as the country transitions into a replacement for the Resource Management Act (RMA).

National

Machinery & Products

Calf feeding boost

Advantage Plastics says it is revolutionising calf meal storage and handling, making farm life easier, safer, and more efficient this…

JD's precision essentials

Farmers across New Zealand are renowned for their productivity and efficiency, always wanting to do more with less, while getting…

» Latest Print Issues Online

The Hound

Are they serious?

OPINION: The Greens aren’t serious people when it comes to the economy, so let’s not spend too much on their…

A hurry up!

OPINION: PM Chris Luxon is getting pinged lately for rolling out the old 'we're still a new government' line when…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter