New tyre prices have jumped by up to 28% over the past 12 months, with manufacturers continuing to announce price hikes.

Tyre prices are heavily dependent on oil prices and oil-related commodities as well as natural rubber and energy.

Manufacturers are quoting a shortage of raw materials, consequent escalation of supplier prices, logistical issues such as rising shipping costs and a global shortage of containers as reasons for the hikes.

The Irish Farmers Journal contacted all major agricultural tyre suppliers in the Irish market for a comment.

Many, such as Michelin, BKT and Continental, didn’t quote figures, but from some of their Irish retailers we understand they have imposed hikes of 15-20% over the past 12-months.

Since May 2021, Mitas and Trelleborg (both owned by the same parent company , CGS Holding a.s.) have imposed four price increases totalling 28%, while Vredestein noted it was forced to increase prices by 15-20% in the past 18 months.

Tyre price hikes over the last 12 months mean a set of 650/65 R38s on the rear and 540/65 R28s on the front would add an additional €1,000 plus VAT to the overall price.

One of Ireland’s major tyre distributors explained: “In the space of four to five months last year, container shipping costs went from $2,000 up to $16,000 per unit. A container will hold 70 typical tractor tyres, meaning an additional cost of $200 per tyre. Currency is another factor. All tyres and associated raw materials are traded in dollars.

“Last year, €1 was buying $1.20, today that €1 is only buying $1.12-$1.13. Tyre lead times have also increased to anywhere from three to six months. It’s posed more of a challenge to have the correct tyres in stock.”

What does this mean?

The go-to size on most 150-180hp tractors is 650/65 R38s on the rear and 540/65 R28s on the front. Taking a decent branded tyre as an example, these hikes would add €1,000 plus VAT. Meanwhile, for the 120hp tractor with a loader shod on 520/70 R38s and 420/70 R28s, these hikes would add €600 plus VAT.

Outlook for the next 12 months

Although COVID-19 restrictions have eased for the most part, the current market situation is still heavily affected by the trials and tribulations faced over the past 24 months. The availability of materials and logistical issues are among the biggest concerns of a number of manufacturers.

Lucia Salmaso, CEO of BKT Europe, explained: “Container shortage was and still is the real issue, with 12.5% of the global capacity unavailable. We are facing a new and very dynamic era, where the elements and factors have changed so fast, from raw materials supply as well as their costs, to shipping and logistics difficulties and anomalies. As we look ahead to 2022, we believe the market will continue to be strong because the demand has been solid.”

A spokesperson for Vredestein said the company expects to see slower demand for the coming 12 months as a result of commodity price increases at both production and farm level. Fertiliser is the main issue at farm level, which Vredestein feel will influence farmers’ long-term investments.

While BKT is not experiencing any supply issues and does not expect to, Vredestein believes some shortages will be felt as a result of demand within some of its product groups.