Once-yearly spend return in Scotland?

Scottish machinery dealers might be on the cusp of seeing a return to a traditional, once-yearly pattern of spending on replacment equipment as producers get used to the new support regime for agriculture.

That bold statement is the reflection among a handful of dealerships that suggests spending patterns, which had been expected to change during 2005 as producers awaited the introduction of the single payment, may be changing for good.

Traditionally, autumn and winter saw most replacement machinery sold as producers reaped the reward of year-round toil when selling cattle, sheep and crops ahead of winter.

But the introduction of subsidies over recent decades and the spread of payment dates throughout the year for different schemes saw spending patterns broaden.

Today, however, history is repeating itself, say dealers. The refinement of former subsidy payments consolidated to just one annual payment at the turn of the year could see a return to the sector’s historic spending pattern.

Since single payments began arriving with Scottish producers from late 2005, dealers report momentum has built gradually into May this year.

But that has been usurped by a sudden rush for grass kit as weather improved in recent weeks and forage crop growth picked up.

It’s an important market for machinery dealers north of the border, as livestock accounts for 42% of the country’s agricultural output compared with just 18% from the arable sector in 2005, according to industry figures.

Buyers have very much left it to the last minute before buying new or replacement equipment rather that investing early in the hope of better prospects, say observers.

That has put pressure on supply chains, with a few dealers’ forecourts awaiting new stock to meet demand.

In addition to the early arrival of single payments (compared with English counterparts at least) the reasonable trade for both beef cattle and finished lambs has helped ease some pressure on producers’ coffers so far in 2006, say traders.

But few will speculate on the future. Sales of used tractors, for example, are up marginally on pre-2006 seasons, but new registrations are down by as much as 10-15%, report dealerships.

It’s thought producers are hedging their bets to see what this season’s markets for livestock and crops yield before committing to large capital purchases.

Producers are still concerned over the longer-term effect on income from the change to support payments for the sector.

That will alter the pattern of investment in replacement equipment.

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