New Zealand reached a peak of 34,549 registered tractors in March 2022. Photo: Marika Khabazi
New Zealand has fallen from 'peak tractor' with bigger machinery, rising on-farm costs and farmers becoming more efficient driving sales down.
Infometrics chief executive Brad Olsen says as a key piece of farm equipment, tractors have long been thought of as a good economic indicator of farm spending and investment.
The more tractors, the more spending, and in turn the better the health of the primary sector - but this was changing, he said.
Recent Infomatics' analysis of data from Stats NZ and the New Zealand Transport Agency showed the country hit 'peak tractor' in 2022.
It showed the number of active tractors registered in New Zealand reached a peak of 34,549 in March 2022. By March this year that had dropped 4.4 percent to 33,044.
The decline in tractor numbers is largely due to the low number of new tractor registrations over time. In the 12 months to April this year, there were 1925 new tractors registered in New Zealand, down 17 percent from a year ago and the smallest annual total since mid-2001.
Both the actual number of registered tractors, and the 12-month moving average, have now fallen below 33,000, the first time tractor numbers have been beneath this threshold since 2017.
Olsen said the drop was being driven by a range of factors, including changes in technology and farming practices.
"Particularly the likes of larger tractors coming on stream, larger farms meaning you don't need quite as many tractors because of larger parcels of land, and also a bit more corpritisation of farming in New Zealand where people are using contractors and similar to ensure whatever they're buying tractors and otherwise are most efficiently used."
Olsen acknowledged challenging conditions in recent years, including increased on-farm costs and higher interest rates, had put pressure on farmers and limited opportunities for new investment with many running tractors for as long as possible.
He said a level of continued concentration in farms across the country into larger farm operations may have also contributed to a rationalisation of tractor assets nationally.
Farmers also seemed to be investing differently as was evident at the recent Mystery Creek Fieldays near Hamilton.
"People are starting to increasingly embrace a much wider more diverse set of technology in the primary sector," Olsen said.
"You know there were a lot more drones at Fieldays this year, a lot of talk about wearables and the importance of the productivity gains that those sort of options bring."
Tractor sales at the Fieldays seemed to have been buoyed though by the government's new tax incentive for farm machinery.
Tractor and Machinery Association president Jaiden Drought said the Fieldays had been "fantastic".
"Everyone went into the Fieldays very buoyant and the show was certainly a success. Everyone had significantly higher inquiry - they thought that even day one of the show was better than all the days combined last year."
Drought felt the drop-off since 2022 related to post-Covid conditions, which included farmers using tractors for longer and more jobs on farm.
He said some of this market uncertainty remained, especially given the current geopolitical outlook.
"I think the trend will see an upswing in machinery sales, I think we're just in a little bit of a holding pattern."
He expected sales to improve in the spring.
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