NEW and second-hand agricultural machinery sales are expected to top $4 billion for the first time nationally this year, with a record first half-year of tractor sales in WA contributing.
But stock shortages and delivery delays out to 12-18 months from overseas "source factories" are limiting combine harvester and hay equipment sales volumes and value in WA, according to Alan Kirsten, managing director of agricultural machinery sales market research company Agriview Pty Ltd.
Presenting remotely from Melbourne, Mr Kirsten gave an industry performance overview last Friday to more than 40 agricultural machinery dealers, repairers and constructors at the Farm Machinery and Industry Association (FM&IA) of WA conference - returning this year after a COVID-19 imposed recess last year.
"In dollar terms, we were nearly a $4 billion industry last year and that's remarkable (given COVID-19's impact on global supply chains and shipping)," Mr Kirsten said.
"By the end of this year it will be a $4b industry and there's more to come.
"What really staggers me is that it is just 373 businesses putting through $4b worth of machinery sales.
"That in itself is going to produce its own range of issues - not right now, but in three to five years' time when we have to support and service the equipment that is going through now.
"We can't find enough technicians and while we (dealer networks) might be addressing this issue ourselves, it does not seem to be taken seriously by governments.
"We need a lot of employment and to attract people to our industry, because supporting the equipment going forward is going to be the challenge.
"From the statistics it is clear 2020 was a stand out year at a national (sales) level and 2021 is heading the same way."
Mr Kirsten told the conference the latest quarterly survey of 80-100 machinery dealers, Agriview conducted for the Tractor and Machinery Association, showed 68 per cent planned to increase their workforce and 17.4pc of them thought their turnover would increase in the next six months.
"At the moment everybody is in the same situation, they can sell whatever they can get from the factories - it's good times," he said.
"Order books are full and there's no sign of a decline in sales, but market share is being determined by what you can physically get hold of at the moment."
Some dealers were being hindered by supply shortages more than others and electronic components and implement tyres were two of the difficult-to-obtain items holding back potential sales in some market segments.
Mr Kirsten said despite delivery delays, demand remained very good across the agriculture machinery sector and was expected to carry through into next year.
However he said "supply catch up" could be obscuring market trends and it was likely to be 2023 before they were clearly exposed.
"I would expect by 2023 the (sales) numbers will start to slow down - they're not going to fall off a cliff, but they will slow," Mr Kirsten predicted.
He said national tractor sales in the first six months of this year were up 31pc year-on-year by volume - 6987 units compared to 9150 - and up 46pc in value, from $810 million to $1.18b.
"We've just finished tabulating the figures for July and they're up a further 20pc, so we are up to the 7500 (units sold) mark after seven months," he said.
"On a rolling 12-month basis, national tractor sales stand at 15,802 units.
"(By the end of the year) that could be nearly 19,000 tractors and, for as long as I've been in the stats game, we've never got near that level.
"The last time we got close to that was in 2007."
National combine harvester sales were up 15pc to 154 (134) and on a rolling 12 months basis stand at 692 units.
Mr Kirsten said based on harvest predictions across the country, combine demand and demand for parts for them are likely to spike in September, October and November.
"It (WA's predicted bin-burster harvest) is going to be very heavy back end, so everybody is very bullish about combine sales this year," he said.
"Some are saying they could go to more than 1000 and we haven't done that for a long time."
National baler and hay tools sales eased 18pc - down to 198 (242) in the first six months - and on a rolling 12-month basis stand at 1251 units.
"That is just supply shortage, there is no shortage of demand," Mr Kirsten explained.
"Even on locally-made stuff there's a waiting list because manufacturers can't get materials and these figures are on delivered units."
In the first half of this year in WA tractors sales were at record levels, up 34pc year-on-year in volume to 882 (659) and up 47pc in value to $197.1m ($134.1m), he said.
On a rolling 12-month basis tractor sales are 22pc up at 1407 units - also a record result.
In that market segment, sales of tractors rated at under 60 horsepower were up 43pc to 230 (161 in the corresponding six months last year) and over 60hp sales were up 31pc to 652 (498).
On a rolling 12-month basis to the end of June, under 60hp tractor sales were up 34pc to 474 (353) and over 60hp up 17pc to 933 (798).
The biggest sales increase - to 324 units (218) - in the 2020-21 financial year was in 200hp plus tractors which look like setting a sales record this year, Mr Kirsten said.
"Lifestyle tractors", up to 60hp and the biggest market sector by volume, are also heading for a record, he said.
First-half WA combine harvester sales were down 79pc to 10 (48) and on a rolling 12-month basis were down 45pc at 147 (266) on the corresponding period - the lowest number sold in the past nine financial years..
"That (sales decline) was just because we couldn't get them," Mr Kirsten said.
"We cleaned them out last year - that's why those figures are down.
"The first half result is the lowest since 2014 and the 12-month rolling result is the lowest since 2011, but that will change by the end of the year."
Baler sales were down 70pc - six compared to 20 in the first six months last year - but on a rolling 12-month basis were up 10pc to 124 units, with demand again outstripping supply.
Total WA baler sales of 124 units in 2020-21 was the highest in the past nine financial years, with annual sales trending up for the past six years.
Round balers were most popular, with 64 units sold and large squares balers second most popular, with 48 sold in a continuing rising trend.
Last year, national tractor sales topped 10,000 for the 10th consecutive year and the 23.6pc sales increase, to 13,639 units, was the highest year-on-year increase since 1989.
Mr Kirsten described 2020 as an "exceptional year" for tractor sales.
National combine sales rebounded 25pc to 672 units and baler sales were the highest since 1981, at 1295, a 37pc increase on the previous year.
Other hay tools sales were up 39pc to just under 3000 units, which was the highest level since Agriview began collecting information on that market segment in 2009.
Total value of national agriculture machinery sales last year was $3.8b, compared to $3.1b in 2019.
Tractor sales generated $1.4b ($1.3b) and were up 9pc, combine harvester sales $439.9m ($359.3m), up 22pc, balers, hay tools and windrower sales $335.7m ($241.3m), up 39pc and self-propelled sprayer sales $450m ($334.4m), up 35pc year on year.
Sales of "other agriculture equipment" generated most revenue at $785m ($575m), an increase last year of 37pc.
In WA last year, tractor sales increased 1pc to 1185 units, while combine harvester sales declined 26pc to 185.
Last year WA baler sales were the highest since 2007, up by 31pc to 138 units.
Rounds baler sales were up 17pc to 74, large squares balers were up 56pc to 50 sold and only 14 small squares balers were sold, similar to the previous year.
Other hay tools sales were the highest on record, up 43pc to 260 units.
Total value of agricultural machinery sales in WA last year topped $352.4m ($449.1m), with tractor sales value down to $198.3m ($252m), despite a small increase in number sold.
Combine harvester sales generated $123.9m ($175.8m), while balers, hay tools and windrower sales generated $30.2m ($21.3m) - the only segment to increase sales value last year.
"WA was out of step with the rest of the country last year, but I think you'll come back into step this year, having looked at the results for the first half of the year," Mr Kirsten said.
