Milk price cuts hit tractor sales

Tractor deals have been put on hold as milk price cuts continue to take their grip on dairy producers.

Registrations of machines larger than 50hp were down by 1,231 or almost 23%, in June, compared to figures from June 2011, said the Agricultural Engineers Association.

John Bownes, who owns a machinery dealership in Winsford, Cheshire – one of the UK’s biggest milk-producing counties – said many dairy farmers were reluctant to buy machinery since processors had announced a further 2p/litre cut in farmgate milk prices to come into effect from August.

“We are not getting any decisions out of farmers. The milk price drop is really affecting trade.

“Deals we have ongoing have been put on hold because of the reduction in milk price.

“Even second-hand tractors and used machinery sales are suffering. Selling stuff to dairy farmers at the moment is dead, because they simply haven’t got the capital to spend.”

Mr Bownes said unless something was done to secure a better price soon the situation would only get worse.

“Many of our customers are producing 1.5-2m litres a year, so it’s a significant amount of cash. It’s going to have a very big knock-on effect,” he added.

Overall, the AEA said registrations were up by 4% in the first six months of the year, compared with the same period in 2011.

Read more on our milk price cuts crisis page