British farmers are estimated to have spent approaching £1 billion on farm equipment in the first 6 months of the year, an increase of nearly 10% on a year earlier.
Tractors are generally the best indicator of activity and 10,649 units of over 50 hp were registered between January and August, an increase of 3% on the previous year. The average power has continued to move up, to 142hp this year.
The next major sub-sector of the market is the combine harvester; sales have been very strong in this seasonal year and will approach 1,000 units which would be the second highest level in the last decade. This has been driven by higher grain prices and a feature has been that smaller machines have been in demand.
Other machine types to have seen good demand include telescopic loaders and big balers whilst much cultivation and soil preparation equipment has also seen healthy increases in the number of units delivered to dealers. For some particular products there have been delays in delivery as the recovery in sales in much of Continental Europe has led to pressure on factories.
In terms of the value of sales, prices have risen a little under the pressure of rising commodity and energy costs so tractors are presently showing a small increase whilst combine harvesters are similar to last year’s level (much of the additional demand came in autumn of 2010). For the remaining types of machinery AEA surveys suggest that the value of sales so far has been more than 10% above a year earlier.
The current estimates are that the area sown to wheat was slightly higher and the latest ADAS view is that average yields are only slightly down on the year. So total wheat production may even approach the 14.8mt level, which looked extremely unlikely during the drought months. Prices received will have been significantly higher with many getting at least 30% more than last season.
The crop of the year has been Oilseed Rape which saw an increase in sown area of nearly 10% plus a yield improvement and buoyant prices.
Even with the substantial input cost increases many farmers will have had a strong year.
We believe that the immediate outlook for demand for machinery for the rest of 2011 is therefore reasonably favourable and a strong level of enquiries has been reported at the main trade shows.
