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How has the machinery trade been in the past 12 months?
Overall, the trade has been quite good. However, new tractor sales are down 11% in the first seven months of the year. Sales of grass equipment have been reasonably strong, but the tillage market has been difficult.
Is this affecting the level of trade?
Farmer confidence is the key determinant of the market in a given year and factors such as commodity price and outlook, along with weather conditions, very much dictate that. In a more difficult tillage sector, the role of the TAMS II Tillage Capital Investment Scheme cannot be underestimated.
How is weak sterling affecting trade?
On the export side, it was expected to impact negatively, but it has not been as bad as feared. The UK machinery market has actually picked up since the Brexit vote. Furthermore, most other alternative suppliers are also Euro-based and face the same problems.
Are imports increasing from the UK?
We are seeing an increase in the level of used machinery from the UK. But this is off the back of reduced levels in the couple of years prior to the Brexit vote due to a stronger sterling then and low levels of secondhand supply in the UK. The level of private imports has reduced sharply due to a number of factors, such as changes to the registration process, financing and customer reluctance to forego the support and security of dealing with a local dealer.
Is there an oversupply of secondhand machines in the Irish market?
Sales of used implements have become more difficult in recent years and this results in significant value for customers who are prepared to consider such machines. The changed nature of asset finance availability is part of this.
How is this affecting the trade?
Unsold traded-in stock can be a significant drain on a balance sheet. Therefore, we have decided to hold an auction to help towards dealers’ working capital requirements. This auction will be held at Punchestown Event Centre on Saturday 30 September. It is an unreserved auction of stock coming from FTMTA members only.
What challenges do Irish machinery manufacturers face?
At a certain level of development, exports become a necessity to grow most manufacturing businesses. The UK has been our traditional first export market and that may become a more difficult option depending on Brexit. The developing agri technology area is somewhere Ireland also needs to become a leader to increase the value of our products to international farming customers.
What would you like to see the Government do?
We would like to see a programme of accelerated capital allowances which could aid our sector greatly and help Irish farming equip and stay apace with the rapid development of modern farm machinery at no cost to the State.
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