2022 agricultural equipment deliveries have kicked off to fantastic start. This, coupled with many machines that are already on order as customers begin to gear up for spring / summer 2022, is driving the current performance.
TAMA president Kyle Baxter said, “he was seeing and hearing first-hand how strengthened commodity prices are giving farmers and rural contractors the confidence to invest in new equipment”. The flow of equipment into New Zealand has increased dramatically, and this has offered much welcomed relief for customers who are requiring a new piece of equipment, which is then being put to work straight away when it arrives.
Overall tractor sales are up more than 25 percent for the year to date compared to 2021 (which was already an increase on 2020 by around 19%) and this trend looks set to continue with confidence in the agri-sector remaining strong”, according to the Tractor and Machinery Association.
There have been consistent increases across every horsepower sector, with some standout results in certain sectors such as a 20% increase in the sub 40HP sector, coupled with over a 30% increase in the 100-150HP plus sector which is predominantly used in the dairy segment.
Regional performance which has a strong diary influence such as Northland, Waikato, Taranaki, and Southland, have also experienced significant growth. Lastly, in 40Hp – 100HP sector significant growth of 27% has been achieved, with this category predominately focused on horticulture and some dairy segments in regions such as Bay of Plenty, Hawkes Bay and Nelson. Again, strong commodity prices are driving and providing buyer confidence.
The 2022 year recorded a superb start, and that, coupled with increasing imports of Ag equipment, is a trend that will likely remain strong all the way through to summer 2022.
Many of our members are also turning their eyes to beyond 2022, as they look to confirm production slots of equipment that is expected to arrive into NZ around early / mid 2023, thus ensuring that supply continues to meet demand – whichever way it trends.
While the increase in commodity prices is a welcome relief for many producers, it also comes with a sting in the tail. The continued positive agri commodity growth has seen a corresponding growth in the actual commodities that are used to manufacture and supply the equipment, in the form of raw materials, labour, fuel and ocean shipping costs, all of which are having a subsequent flow on affect that increases the cost of goods being delivered to New Zealand.
Continued inbound and outbound supply chain challenges are also greatly impacting the TAMA members who are importers, exporters, and retailers. Global manufacturing constraints are still very much a reality, as plants continue to work through Covid restrictions in their respective countries, and that coupled with constraints in component supply all contribute to disruption to the smooth flow of equipment into New Zealand.
TAMA members who manufacture in New Zealand are experiencing continued growth in customer confidence, and report extremely strong demand for their equipment.
However, they too are also experiencing issues in fulfilling their export market commitments due to the global shipping constraints creating distribution challenges when it comes to getting product shipped out of the country.
“The current border restrictions have left many TAMA members short-staffed. This has created an extremely stressful environment for our individual members, staff, and their customers as they grapple with the strong demand for, and growing deliveries of equipment. We know of course we are not alone in this problem as it’s affecting many industries.
The second half of 2022, which will start to see the relaxing of border controls, will be a welcome relief for many people. This combined with the move to the orange traffic light across the country will also allow face to face business relationships to be renewed across the sector. As members businesses are essentially relationship and people orientated, that change is incredibly important and welcomed”