Finding a good deal on borrowed funds generally doesn't come much cheaper than interest rates at eight per cent these days, but the farm machinery market has been feeling extra generous.
After new machinery sales sagged about 25pc last year, dealers and machinery companies have been cranking up their selling efforts to tempt farmers back into their yards.
Although the official Reserve Bank of Australia's benchmark cash rate is sitting at 4.35pc, finance deals on new gear at around 3pc, or lower, have been popping up across the industry over summer - including some doorbuster offers at zero per cent.
However, buyers have to be quick, with most discount lending campaigns tending to make a splash for short periods of just weeks.
"We haven't seen activity like this in machinery finance for a few years, partly because all finance was generally so cheap for a long time," said Tractor and Machinery Association executive director, Gary Northover.
Also, severe supply shortages during the COVID pandemic, plus government investment write-off incentives at tax time, and a run of big seasons underpinning demand, left the machinery industry with little reason to cook up cheap finance offers.
However, as seasonal conditions in many areas turned patchy last winter and tax incentives dried up, too, sales of most new gear subsided.
Sales were especially slow for smaller scale tractors and related equipment.
A run of big price rises across the farm machinery market in recent years also weighed on producers' spending decisions by last year.
Lower horsepower products tend to be the most interest rate sensitive
- Gary Northover, Tractor and Machinery Association of Australia
By the end of 2023 the tractor market had slipped 25pc behind 2022's record 17,700 unit sales to 14,500, most notably in Victoria and NSW.
The under-30 kilowatt category was 30pc behind 2022; the 30kW-75kW range down 28pc, and the 75kW-150kW segment ended 2023 26pc off the boil, according to TMA's statistics.
"Lower horsepower products tend to be the most interest rate sensitive, especially in the leisure property product categories," Mr Northover said.
"Right now it seems the smaller end of the market is looking for a bit more incentive to buy."
However, selected bigger gear from the big four major brands - John Deere, New Holland, Case IH and Agco - may also be likely to come with finance offers at 4pc or lower.
What a deal
Recent typical cheap finance deals on new gear have ranged from a zero interest for a 40-month loan term on new Deutz Fahr machinery during January, to 3.95pc and 4.99pc respectively on New Zealand-made Aitchison seeding gear and SAM Machinery fertiliser spreaders, courtesy of Power Farming Group's (PFG) credit service.
Other hard to ignore offers have included 0.9pc for a 36-month Bobcat finance; 2.49pc over 48 months from Agco on Fendt tractors; farm trailer finance from the NSW-based Armour Group ranging from 2.99pc over 26 months to 4.99 for 60 months, or no deposit deals on Landini tractors from Inlon.
"Deals like these are well below the more typical finance industry rates of 7pc to 9pc at the moment," said head of food and agribusiness sales at asset financing services giant, De Lage Landen (DLL), Greg Crawford.
Despite upbeat seasonal prospects emerging in many cropping areas, dealers and manufacturers had more new stock on hand than they want after the market slowed considerably last year.
Machinery businesses now needed to attract farmers' attention.
Sense of urgency
"They're deliberately trying to generate a sense of urgency with attractive rate offers people will talk about," he said.
"The discounts don't last long - maybe only a month or six weeks.
"The format is nothing new - Gerry Harvey does the same sort of deals with manufacturers to move washing machines and televisions."
TMA's Mr Northover said dealers and farm equipment makers did not provide too many specifics about how their finance packages were constructed.
"The big manufacturers have the benefit of huge in-house global finance businesses - they effectively own their own banks," he said.
"The factory might talk with its distributors to establish a product discount which is combined with whatever the finance people can offer to build a discounted credit deal for the customer."
Mr Crawford noted many major players now subsidised finance offers on their gear "pretty regularly".
"It happens on everything from big horsepower tractors to lawn mowers."
DLL, a Rabobank subsidiary, backs more than a third of the farm machinery finance deals provided to Australian farmers, including for Agco and second tier machinery businesses not aligned with Case IH, John Deere and New Holland.
Seasonal boost
Mr Crawford said the burst of finance promotions had taken advantage of an improved mood among farmers after an unexpected wet summer in eastern Australia had lifted summer crop prospects, particularly for dryland cotton, and the outlook for a solid winter sowing effort.
Many farmers were also actively looking to lift the efficiency of their cropping equipment by investing in gear that could reduce their tillage passes and cut fuel, fertiliser and chemical application costs.
The TMA has also noted farmers' orders for new gear are no longer likely to involve lag times of up to a year.
"It's quite likely the gear they order today could be available immediately, or coming off a container ship within a month or two," he said.
"Specific orders for bigger roll-on, roll-off machines machinery might involve a nine or 12-month wait."