Looking for a big tractor or combine? Join the queue. After a prolonged climatic drought, Australia is now having a machinery supply drought.
While this particular drought will be overcome—if buyers are prepared to wait up to nine months for a shiny new machine—the tractors Australia isn’t getting are being sold, in volume, to our competitors and our export markets.
After a half-century of food abundance, the world has woken up to the fact that food is another finite resource, and is taking steps to either profit from the situation, or secure supplies.
The global rush toward food and biofuels was evident at the Ag-Quip field days in Gunnedah last week, in the story told by every major machinery distributor: order now if you want big equipment, because some models won’t arrive until at least mid-2009.
Australia has always been an important market for major machinery manufacturers, but its importance plummeted as sales dived with the drought.
“By September 2007, our machinery market had fallen to incredibly low levels,” said Vin Delahunty, executive director of the Tractor and Machinery Association of Australia.
“It was approaching the dark days of 1991 and the interest rate boom, days that everyone had hoped not to see again.
"With our market right down, the reliance of international machinery manufacturers on Australia has diminished.”
That’s causing pain to machinery dealers and farmers alike, because in a sudden burst of optimism, Australian farmers are throwing off the drought-induced restraints of the past few years and are coming out spending.
Unfortunately, so are farmers everywhere else.
In North America and Brazil, mass equipment purchases are being driven by the burgeoning demand for biofuels.
China and India are also shipping in big quantities of broadacre machinery, as they modernise agricultural production systems to cater for demand for grain and grain-fed protein among their increasingly affluent populations.
And a new name is emerging as a potentially serious agricultural player: Russia.
At Ag-Quip, the Russian influence on the global machinery market was best portrayed by Versatile, the former Canadian company famous for producing big articulated tractors.
“We don’t have a Versatile on the stand, because we’ve sold everything we’ve been able to bring into the country,” said Doug Robinson, general manager of Versatile distributor PFG Australia’s Agriculture Division.
“We’ve bought every unit we could get our hands on, and only come up with 25 tractors—and then not all with the specs we wanted.
"They are due to land in early 2009, but we’ve already sold at least half.”
The former Canadian owner of Versatile was last year bought out by a Russian company, Mr Robinson said, and many tractors coming off the assembly line are being diverted directly to Russia’s neglected farmlands.
John Deere is also struggling with demand, much of it from Russia, which means some long forward order lines for Australian fans of the green machines.
If someone wants to order a JD combine, or one of the 7000, 8000 or 9000 series row-cropping tractors today, they are looking at delivery in April or May of 2009, said Phil John of Peel Valley Machinery.
Mr John, general manager of the Tamworth-based dealership, said John Deere is investing about $US100 million in new production facilities in South America and Europe, with the aim of boosting production capacity by 4800 units.
“The upside is that people can order now off the factory floor to custom specifications,” Mr John said.
On the New Holland stand, Product Sales Support manager Peter Russell said buyers are looking at a second quarter 2009 delivery for the higher horsepower T8000 and 9000 series New Holland tractors.
He echoed national sales manager for Agco, Andrew Murray who is also facing 6-9 month delivery times for its larger tractors.
Mr Murray said that the price push on raw materials like steel and rubber is at the same time exerting price pressure on big machinery.
Rubber shortages are so acute that distributors can’t source tyres of certain specifications for new machines.
“We’ve gone from being knocked around by drought over the past 5-10 years, to the point where people are very optimistic but we are having trouble getting the product to support them,” Mr Murray said.
Email a friend
Favourites
Del.icio.us
Facebook
Digg
StumbleUpon
MySpace
Reddit
Newsvine
LinkedIn
Kwoff