Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

NZ tractor sales hit decade high in third quarter

NZ tractor sales hit decade high in Q3 on record dairy payout, high kiwi

By Tina Morrison

Dec. 2 (BusinessDesk) - New Zealand tractor sales hit their highest level in a decade in the third quarter as farmers benefiting from this year's record milk payout and the high local currency bought new equipment.

Tractor registrations rose 8.8 percent to 925 in the three months through September, from the same quarter a year earlier, according to Land Transport Safety Authority figures published by Statistics NZ. The three-month period would have captured orders from the NZ National Agricultural Fieldays at Mystery Creek in Hamilton in June, helping tractor registrations rise to their highest since the December 2004 quarter when they reached 970.

Farmers have been increasing their spending on equipment such as tractors, farm bikes, milking machines, irrigators, ploughs and harvesters this year as cash flows were boosted by Fonterra Cooperative Group's record payout to dairy farmers of $8.40 per kilogram of milk solids for the 2013/14 season. Also helping drive sales was the higher value of the local currency, with the kiwi touching a record 82.03 in July when measured against a basket of major currencies on a trade-weighted basis, reducing the price of imported farm machinery.

"Farmers were particularly cashed up through the middle of the year and around the time of Fieldays they would have been looking pretty hard at some new kit which would have included tractors." ASB Bank rural economist Nathan Penny told BusinessDesk. "Many of them would have put in orders then and those orders may not have been available to be filled straight away, so they would have come through in the months that followed, so that includes the September quarter.

"Farmers were cashed up after a record season, excellent production and the record milk price and some of them would have been looking to replace their tractors," Penny said. The strong currency in the middle of the year would have helped push up demand, he said.

Still, registrations may pull back from these levels in the fourth quarter and into next year as Fonterra drops its forecast payout for the coming season to reflect lower global milk prices.

Fonterra is scheduled to update its forecast for the coming season next week, with most economists expecting it will cut its current forecast of $5.30/kgMS.

ASB's Penny expects the payout to fall to $4.70kg/MS, which reflects his view that GlobalDairyTrade auction prices won't recover until next year. He lowered his forecast following the last auction two weeks ago when dairy product prices fell to their lowest in more than five years. The next auction will be held overnight.

"We have seen dairy incomes fall quite strongly so we expect that farmers are going to put on hold some capital purchases and defer maintenance" which will flow through into wider regional economies, he said.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

$7.5 Billion Surplus: Government Accounts "Show Strong Economy"

“The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more on infrastructure and make record investments in health and education,” Grant Robertson says. More>>

ALSO:

New OIO Application Trumps Judicial Review: OceanaGold Cleared To Buy Land For Waihi Tailings Expansion

In a surprise turnaround, the government has given OceanaGold a greenlight to buy land to expand its Waihi mine after the application was previously turned down by Land Information Minister Eugenie Sage. More>>

ALSO:

Christchurch Rebuild: Fletcher Sued For $7.5m Over Justice Precinct

Fletcher Building is being sued for $7.5 million by utilities contractor Electrix, one of the subcontractors on the Christchurch Justice and Emergency Services Precinct. More>>

Three New Drugs: PHARMAC Signs Bundle Deal For More Cancer Medicines

420 New Zealanders with lung cancer, breast cancer, multiple sclerosis and respiratory disease will benefit each year from a bundle deal PHARMAC has finalised with a medicine supplier. More>>

ALSO:

"Levels Playing Field": Government Responds To Electricity Price Review

The changes announced today include: • Supporting new and independent retailers by requiring the big power companies to sell into the wholesale market at affordable rates. • Extending discount rates to all customers • A pilot scheme to help customers who have not switched power providers before to shop around for better deals... More>>

ALSO: