Tractor sales rose compared to last year and may have ‘reached their peak’

Tractor registrations in July rose 16.2% compared to July last year, with 11,451 registrations so far in 2008. But this could mark the end of the boom period, according Chris Evans of the Agricultural Engineers Association.

The last couple of months have seen a downturn in sales, he says, with potential buyers exercising caution when it comes to buying due to harvest price prospects and, more recently, wet weather.

“There is a substantial order bank still to be delivered following a lot of orders earlier in the year, and this year will clearly still be very good for tractor sales – in fact the best since 1996 in unit sales.”

The more optimistic view for 2009 is based on there being a lag between income and investment. “Depending on profitability, farmers may continue to invest next year. There is also the argument that farmers may ‘tool up’ for potentially more difficult years to come.”

Tractors on the road 4

However, the fact that many farmers have already invested in new kit, plus higher input costs and declining grain prices, mean that investment may not be quite so attractive.

Latest figures suggest that the west midlands have seen a considerable rise in registrations, up 33.1% on the same month last year, with the south-east and east midlands seeing 26.3% and 23.1% rises respectively.

Northern Irish farmers are already being more cautious, with registrations falling by 4.2% in the period between January and July 2008.

“Because of the huge variability in profitability this year, the industry is bound to be more guarded,” he says. “A lot will depend on what the weather does in the next couple of weeks as to whether we see another surge in sales.”

“Although it’s difficult to predict, my view is that we are at the peak of the cycle, and tractor sales are more likely to go down than up next year.”