The higher crop production forecast for the coming season has resulted in a rise in combine harvester sales during February, which could mean farmers are preparing for a good harvesting season.
This was according to Greg Cadman, chairperson of the South African Agricultural Machinery Association, who said the anticipated overall maize crop of 14,6 million tons was expected to be almost 30% up on last year.
Combine harvester sales for February amounted to 18 units, which was an increase of three units compared with the same month last year. “On a year-to-date basis, combine harvester sales are now 21% up on the same period last year.”
However, he said sales figures for tractors were almost 8% lower at 485 units for the period under review, compared with the 526 units sold in February last year.
“Current combine harvester sales, however, show that farmers are preparing to harvest good crops.”
Cadman said the tractor market was still highly price-competitive, and despite the recent weakness of the rand against major currencies, this price-sensitivity on the market was likely to continue over the short term.
“Nevertheless, industry sentiment is one of cautious optimism, and expectations are that tractor sales in 2020 will be similar to those in 2019,” he said.
However, Corné Louw, senior economist at Grain SA, said that tractor sales were usually a good indication of the state of the agricultural economy in South Africa.
“Tractor sales was already 22% lower in 2019 than in 2018, so for tractor sales to be lower in the first two months of 2020, shows the poor economic conditions agriculture currently finds itself in.”
Louw added that grain producers could definitely look forward to a better season in most summer grain production regions this year. “[However, this] has not done anything for producers’ pockets.”