Tractor industry says demand for agricultural machinery remains buoyant

Photo / File

Growing demand for agricultural machinery and equipment has kicked 2021 off to a 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, president Kyle Baxter said.

Baxter said he was seeing 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 per cent 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 per cent increase in the sub 40HP sector plus a nearly 60 per cent increase in the predominantly cropping and contracting segments of 150HP-plus.

Investment in the 40Hp-150HP sector, which represented mainly horticulture and dairy, experienced a more modest growth of 8 per cent, but this could increase quickly as new equipment arrived in the country, Baxter said.

However, border control issues continued to be a challenge, affecting both the supply of staff and equipment, Baxter said.

"The current border restrictions have left many [association] members short-staffed and this is extremely stressful for individual members, staff and customers."

"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, Baxter said.

"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."

While association members who manufactured in New Zealand were enjoying strong demand for their equipment, they were also experiencing issues in fulfilling export market orders due to global shipping constraints, Baxter said.

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," Baxter said.