The optimism of machinery dealers earlier this year has subsided a little, as new tractor sales have stagnated over the past few months.
According to the Farm Tractor and Machinery Trade Association (FTMTA), tractor registrations were just 1% up on last year with three more units being sold this March compared twelve months ago.
Early hopes
2022 had seen the year end with an overall 10% decline in sales compared to 2012 which, the trade agrees, was an excellent year for machinery sales.
This year started off on an even brighter footing than 2021, with 485 units being sold compared with 478 from that earlier year, however the situation has deteriorated since and sales are showing a slowdown from the January high.
February and March have seen sales on a par with last year, and it is only the January total that is keeping the rolling total of new registrations significantly ahead at 8%.
This lacklustre performance puts a number on the general feeling in the trade that this year is not going to be a bumper sales year.
Cause and effect
When talking to dealers there are two major reasons given for this less-than-expected enthusiasm for new tractors. The first is the cost of new machinery and the second is the reduction in commodity prices, especially milk which has retuned to the 40c/L level from around 70c of last summer.
Within the trade the generally accepted figure for machinery price inflation over the last two years is around 25%, with examples being given that exceed this level considerably.
This, it is maintained, is unsustainable and getting ever harder to justify, especially with steel prices returning to near pre-Covid-19 levels, although it is recognised that energy prices and logistics have added extra costs to production.
Return to normal stock levels
Most outlets report adequate stock levels and a reduction in lead times. Indeed, one prominent franchised dealer in the west notes that he is likely to have a surplus of balers this year unless sales pick up.
There are also signs that factories are not working to full capacity at the moment. Manufacturers are said to be seeking forward orders, a situation that has not been seen for some time, and suddenly there is no more talk of chip shortages.
As if to underline the effect of increased cost on new tractor sales there has been a 17% rise in used tractor sales over the year so far. 829 used tractors have been registered in Ireland for the first time in 2023, compared to 706 at this time last year.
The situation is not quite so gloomy with regards to telescopic loaders which have enjoyed a 38% increase over the year, while wheeled loaders are also up, this time by 21%.
The FTMTA notes that it is the budget end of the wheeled-loader market that is enjoying the boom, which may well be a reflection on the shortage of used low-horsepower tractor/loader combinations coming in from the UK.