Tractor sales have slowed more sharply than expected, on the back of El Nino forecasts and higher interest rates.
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This fall follows the value of yearly new tractor sales in Australia hitting record highs in 2022.
The Tractor and Machinery Association of Australia's State of the Industry Report showed that after hitting the $2 billion mark in 2021, last year's tractor sales climbed slightly to reach another new peak of $2.1 billion, a 3 per cent increase on the previous year.
But this year's sales have slowed significantly, with May's tractor purchases down 19pc on the same month last year.
TMA executive director Gary Northover said there were signs of a greater than anticipated slowdown.
"Expectations of a June spurt as buyers take advantage of the end to the Instant Asset Write Off scheme are now low as the combined impact of higher interest rates, stock availability, machinery price rises along with a general drop in demand is seeing sales reduce," he said.
Mr Northover said while demand for agricultural products remained strong, the ABARES forecast of a likely El Nino weather pattern had begun to impact the thinking of some farmers, with a pullback in spending likely.
"Despite this we foresee a reasonable realignment of the industry as the features and benefits of new tractors continues to meet the needs of customers," he said.
Sales across the nation were down across the board in May, with Victoria down 22pc on the same month last year and 30pc behind the year to date. Queensland was down 19pc and is 16pc behind year to date, NSW was down 16pc to be 23pc off YTD.
Sales in Western Australia reported a drop of 1pc but despite more strong sales of high HP tractors it remains 12pc behind last year. South Australia recorded a 16pc drop and now sits 12pc behind YTD and Tasmania was off 48pc for the month, 26pc off YTD with sales in the NT finishing 47pc down but remained 2pc up YTD.
Looking at the State of the Industry report, last year there were 17,702 tractors delivered across Australia, a 3pc rise on 2021. It was the twelfth year in a row where national sales surpassed the 10,000 unit mark.
Driving the increase in units sold was small-area farmers, with the less than 60HP sales rising by 10.8pc.
The driver for value growth came from the 200+ HP range, increasing 6.2pc or $64 million.
Across the agricultural machinery market, turnover reached $5.6bn last year.
The value of combine harvester and header sales increased by about 10pc with $1bn worth of new machines sold and this is on the back of 2021's massive growth.
The self-propelled sprayer market continued to grow to be worth an estimated $690m, up from $600m in 2021.
Hay and forage equipment sales continued the decline of 2021, and were nowhere near record 2020 results, with sales of balers, hay tools and windrowers totalling $220m.
But tillage and seeding equipment sales improved and were estimated to have reached $460m, a steady rise in both units and value.
Mr Northover said 2022 was another unique year, as the strong demand from customer groups combined with the ongoing support provided by the Federal Government's Temporary Full Expensing program drove the industry to new highs.
Key highlights for each state from the State of the Industry report on 2022 include:
Queensland
Demand for tractors continued to climb in Queensland, with 4175 units delivered, up 14pc on 2021.
Leading the charge was the south-west region, with sales in Stanthorpe up 63pc, Goondiwindi up 58pc and Toowoomba up 48pc.
The Mackay zone also performed well, with the Prosperine region sales up 48pc on the previous year.
New South Wales
Sales were relatively steady in New South Wales, with 5409 units moved.
Areas with significant growth were in the north and included Nyngan (48pc), Narrabri (37pc) and Armidale (31pc).
Victoria
There were 4307 units sold in Victoria, up slightly by 2pc on 2021.
The Goulburn region drove sales growth, with Yea up 24pc, Shepparton up 23pc and Kyabram up 21pc.
Tasmania
There was an 11pc decline in tractor sales to Tasmania, at 630 units.
The southern area recorded the strongest drop, down 21pc on 2021.
South Australia
In 2021, tractor sale records tumbled in South Australia, and they were down slightly by 3pc in 2022 to 1329 units sold.
But one South Australian region recorded the biggest percentage jump in the nation, with sales in the Gawler area up a whopping 88pc.
Northern Territory
Unit sales continue to be relatively small in the Northern Territory at 154 units moved, but it was up 11pc on 2021.
The value was up 19pc to reach $10 million.
Western Australia
Steady sales were reported in Western Australia, up 4pc to reach 1698 units.
Southern Western Australia had the biggest growth in sales, with Narrogin up 42pc, Wagin up 26pc and Esperance 22pc.
The State of the Industry Report was prepared by Kynetec Australia.
Paula Thompson
Paula Thompson is ACM's National Machinery and Ag Tech writer. She has been an agricultural journalist for more than 20 years. Prior to her current role, she was a reporter with the Stock Journal, covering livestock markets and the grains industry.
Paula Thompson is ACM's National Machinery and Ag Tech writer. She has been an agricultural journalist for more than 20 years. Prior to her current role, she was a reporter with the Stock Journal, covering livestock markets and the grains industry.
