Substantial increases in the sale of farm equipment this year have reflected a continuing catch-up in on-farm vehicle investment as farmers look again to the future…but there’s a warning of an ongoing sting in the tail.
The Tractor and Machinery Association of New Zealand (TAMA) says increases are evident across all tractor horsepower segments and equipment, compared with the first half of 2020.
The overall increase in actual units delivered across New Zealand is 35%, representing an additional 450 tractor sales compared to the same period in 2020. Sales in the under lifestyle 50hp sector have increased more than 40%, while sales numbers in the 60-80hp segment (horticulture sector) have increased around 50%.
Whilst the market looks strong for the rest of 2021, there are several challenges impacting the market, TAMA president Kyle Baxter says. Ongoing production stoppages in global factories due to Covid lockdowns and community outbreaks continue to affect manufacturing timeframes.
Delays in shipping container loads of equipment from Europe can stretch over months, with reduced air cargo space adding to the cost of air freighting spare parts. Container shipping costs have increased drastically, and raw materials such as steel have ballooned in value.
For example, the price of steel has more than doubled in one year (from 550 euros per ton to 1,250 euros per ton). Steel can represent 30 to 40% of the average production cost of farm machinery. There has also been substantial increases in the prices of aluminum (+22%), copper (+63%), rubber (+67%) and foundry products (+90%) inside the past nine months across Asia, USA and Europe, where much of New Zealand’s farm equipment is sourced from.
Labour shortages remain another major concern for the tractor and machinery industry.
Farmers Weekly, Agribusiness, 14 July 2021
These articles were featured in Harcourts Lifestyle & Rural Property Focus, Issue 3 2021.