Sales of agricultural vehicles leaped last year. Are green shoots sprouting down on the farm? Not necessarily, say our ever-cautious farmers
Farm animals are often credited with foreseeing the weather, but did their masters see improved times ahead when they bought 23 per cent more tractors last year? Almost 1,900 new tractors were sold in 2012, and sales of combine harvesters doubled, from 40 to 80.
Almost a quarter of tractors were bought by farmers in Cork, Galway and Wexford, according to the Farm Tractor Machinery Trade Association.
The decision to buy new machinery is not taken lightly. The most popular models of tractors cost from €55,000 to €100,000; the bestselling combines range from €200,000 to €450,000.
So are green shoots sprouting down on the farm? The Irish Farmers’ Association’s chief economist, Rowena Dwyer, says it is more complex than that. The years 2008 and 2009 were very difficult, and, she says, farmers put off decisions on spending in the following two years as a result.
Tractor sales fell by 75 per cent between 2008 and 2010, lending credence to her theory. Confidence returned after two good years in 2010 and 2011, with incomes increasing by almost a third in the latter year.
She also points to the greater recent availability of credit. “There was a tightening of credit conditions for these types of purchases from 2009 into 2010 and even 2011, in line with the overall tightening in credit. But last year we did see a stronger participation from the main banks’ asset divisions.”
Conor Breen of Breen’s Farm Machinery in Cashel, Co Tipperary, says easier access to credit has made a big difference. The machinery company Claas has set up a finance division so customers can get credit. “That has been a big help,” he says. “A lot of combines are sold in that way, because it’s making the repayments more attractive.”
The vast majority of tractor sales are to farmers and contractors who are trading in old tractors, but he says a few could involve the purchase of a new tractor while the old model is kept for work around the yard.
The old rhyme that “Massey is classy but Zetor is better” no longer holds, as John Deere has been the most popular make in recent years. The Tractor Machinery Trade Association cannot name the most popular brands of 2012 yet, under EU competition rules, but the most popular tractor brand in 2011 was John Deere, with a quarter of sales. It was followed by New Holland and Massey Ferguson, each of which accounted for 18 per cent of sales.
So will this bounce in farm machinery sales continue? Not if last year’s weather is anything to go by. The 2012 harvest was described by many as the worst in living memory, and farm incomes fell by between 10.4 and 12 per cent, according to provisional figures; the average farm income was €21,500 last year, according to Teagasc.
But the Farm Tractor Machinery Trade Association’s chief executive, Gary Ryan, says the signs are still good. “Even in the midst of rain and misery last summer, farmers took the long-term view and said, ‘I’ll still be farming this time next year.’ I was talking to quite a few of them at the tail end of the harvest, and the consensus was that, while it was a rough harvest, they were very glad they had invested in newer combines, with tracks or four-wheel drives.
“It kept them going in poorer conditions, and the machines moved faster. I certainly didn’t come across any who were regretting their decision.”
I've got a brand new . . . Men and machines
Pat Halpin: No regrets about buying two tractors
Pat Halpin, a farmer and contractor, bought two tractors last year and has no regrets.
“Never look backwards, always forwards. That’s what I always say. I bought two new Claas tractors, and they’ll pay for themselves.”
From Knocklong, on the Limerick- Tipperary border, he began contracting in 2009, which was a bad year for farming.
“But that’s the way things go. I think it’s the best time to start any business. If you survive in a recession you’ll prosper in the good times.”
Halpin has been buying machinery steadily since he began doing work for other farmers; he says that 2010 and 2011 were good years but that last year was a different story.
“We got through it, in some shape or form, but things would want to be a lot better than they were in 2012.”
When he is not contracting, he is looking after his dairy and beef farm, where feed bills doubled last year because of the bad weather.
Philip Driver: The John Deere hunter
Philip Driver is looking for a tractor at the moment and says it will be his biggest purchase since he began farming, five years ago.
The 25 year-old is a part-time beef and sheep farmer in Shillelagh, Co Wicklow. He is also a mechanic with Templetuohy Farm Machinery, so he knows his tractors. Since he started farming he has made a few purchases, such as trailers, a mower and a baler.
He believes sales have increased because tractors bought during the boom now need to be traded up.
“Most people trade when they have a tractor for four or five years, with about 5,000 hours done,” he says. Credit “has also freed up a lot for farmers lately”.
He wants to buy a 100-horsepower John Deere, costing about €75,000. It will be used for work such as feeding cattle and sheep, spreading fertiliser and making hay and silage.
He likes the idea of using the tractor’s GPS capabilities for precision farming. “It saves on diesel and saves on time.”
Kieran McEvoy Reluctant to buy new machinery
Kieran McEvoy from Portarlington, Co Laois, says he would be very reluctant to buy new machinery.
“We’re tillage farmers, but we wouldn’t be large scale, so we buy second-hand machinery from garages or privately or through Done Deal,” he says. “We’d buy something every year or every second year. I’d go out of business very quickly if I spent a lot of money.”
He upgraded his combine and tractor last year, going from a 1985 to a 1997 combine and increasing the tractor horsepower from 90 to 115.
“I’ve two brothers who’d be into tractors too, and it’s one of our big family discussions. There wouldn’t be a lot else talked about if they are here at dinner-time.”
He says it is good to see farmers invest in machinery. “If every industry did the same, the country would be in a lot better position. If young farmers are prepared to pay €80,000 or €100,000 for a tractor – and you can be sure it will have been well scrutinised by the bank – they should be commended and not scorned.”
