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April tractor sales of 527 units were approximately 5% more than the 500 units sold in April last year, according to Willie Human, chairperson of the South African Agricultural Machinery Association (SAAMA). Year-to-date tractor sales are now almost 22% up on last year. Forty-six combine harvesters were sold in April, 20 more than the 26 units sold in April last year. On a year-to-date basis, combine harvester sales are now approximately 37% up on last year.
Rain dampens market
The late rains have caused problems with harvesting of most summer crops, he pointed out. However, market sentiment is still positive, with farmers waiting to see what the yields and quality of their harvests are going to be once they have harvested their crops. This will delay the whole season going into soil preparation for the forthcoming summer crops. Sales of agricultural machinery are therefore likely to be delayed because of this. Commodity prices are still holding up in most cases.
Optimism remains despite heavy rains
Current predictions are that tractor sales will be similar, or marginally more, than the 6 463 units sold last year. Combine harvester sales in 2025 also are predicted to be higher than the 201 machines sold last year.
This increase in sales, according to Wandile Sihlobo, chief economist at Agbiz, primarily reflects the positive sentiment in the sector about the 2024-25 crop and horticulture harvest due to favourable weather conditions and the base effects, given the weak sales in 2024.
“The heavy rains in April have caused concerns about the crop quality. Still, there remains optimism about the yields, which supports the robust sales. For example, the Crop Estimates Committee forecasts South Africa’s 2024-25 summer grain and oilseeds production at 18,01 million tonnes, 16% higher than the 2023-24 production season, representing a decent recovery from drought.”
Better sales predicted for 2025
Reflecting on the past few years’ performance, he pointed out, it is fair to say that the poor agricultural machinery sales performance in 2024 resulted from three major factors. Firstly, South Africa’s agricultural sector had higher machinery sales between 2020 and 2023. Improved farmers’ incomes supported higher sales due to an ample harvest and higher commodity prices. Thus, there was bound to be some correction, leading to a moderation in sales in 2024.
Secondly, we struggled with a mid-summer drought in the 2023-24 season, weighing on farmers’ fortunes and worsening sales performance. Lastly, the relatively higher interest rates for much of 2024 added to the economic pressures on the sector, leading to poor sales.
“This year, however, things are different,” he said, “as the sales for the first quarter have already shown. The interest rates have eased somewhat from last year’s levels, although there remains uncertainty about the path ahead given the renewed risks to the global economy. Moreover, agricultural production conditions are favourable across most commodities.
Also worth noting is that some farmers may start with machinery replacement in the coming months. All this will support the sales of tractors and combine harvesters in 2025.” – Izak Hofmeyr, Plaas Media
