Farmers’ financial pinch reflected in depressed machinery sales

9 April 2024

By: Lloyd Phillips

A range of factors is contributing to a significant slowdown in purchases of new tractors and combine harvesters by South Africa’s farmers this year.

Despite the offerings of new tractors and combine harvesters being highly competitive between suppliers, farmers are hesitant to buy them. This is reflected in the significant decline in sales of both categories compared to the same period last year.

According to the SA Agricultural Machinery Association (SAAMA) data for the period 1 January to 31 March, sales of new tractors nationwide totalled 1 383 units. This is 28,2% down on the 1 927 new tractors sold during the same period last year.

SAAMA says 52 new combine harvesters were sold in the first three months of the year. This is 44,7% down on the 94 units sold during the same period in 2023.

“March 2024 tractor sales of 498 units were significantly (26%) less than the 676 units sold in March 2023,” says SAAMA’s chairperson, Tallie Giessing.

“Twenty-six combine harvesters were sold in March 2024, which was 13 less than the 39 units sold in March 2023.”

Giessing attributes the declines to factors such as widespread uncertainty among farmers about weather patterns and their impacts on current and future crop yields. 

He adds: “The Crop Estimates Committee is predicting a 2023/24 maize crop that is almost 13% down on last year and a soybean crop that is almost 23% down.”

Agbiz’s chief economist, Wandile Sihlobo, thinks the machinery sales trend is likely to become the norm. “Generally strong agricultural machinery sales these past few years were primarily based on ample grains and oilseed harvests when prices were also favourable,” he says.

Further adding to farmers’ reluctance to buy new capital machinery are the higher interest rates that are pressuring farm finances.

Sihlobo continues: “Also worth noting is that while other input cost prices, such as fertiliser and agrochemicals, softened since 2023, these prices are still generally well above pre-Covid-19 levels, thus also adding pressure on farmers’ finances. Furthermore, the poor summer crop harvest of the 2023/24 production season will also be a constraining factor in the months ahead.”

SAAMA estimates the total new tractor sales for 2024 will be 15%-20% down on the 8 374 sold in 2023.

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