By Helmo Preuss
Tractor sales jumped by 16.8% year-on-year (y/y) to 493 units in May following a 11.3% fall in 2016 to 5,855 units, according to the South African Agricultural Machinery Association (Saama).
The May jump showed that farmers are resilient as they remain optimistic about future prospects despite the fact that the South African economy entered a recession in the first quarter 2017.
The first quarter data saw the recovery in agricultural production. This showed the first quarter-on-quarter (q/q) increase since the fourth quarter 2014 and was up a massive 22.2% q/q seasonally adjusted annualised, while the y/y growth was an equally impressive 10.3%. The positive impact will only truly be felt from the second quarter onwards as the record maize and soybean crops are harvested from May through to September.
The Crop Estimates Committee in its fourth estimate in late May said the 2017 maize crop would rise by 101% compared with the 2016 crop to a record 15.631 million tonnes.
“Overall, crop prospects look very good. The maize crop forecast has been revised upwards again this month, to an all-time record of 15.6 million tons, more than double last year’s crop. Maize yield this season, forecast to be 5.95 t/ha, is the highest yield ever. The soya bean crop, at 1.23 million tons is also the largest crop ever produced. Although these excellent crop prospects have had an adverse effect on crop prices, the overall sentiment in the industry is positive. As harvesting is taking place, farmers are now better able to judge what their crops are yielding,” Saama said.
Industry expectations for 2017 are that overall tractor sales should be at least as good as those in 2016. In the first five months of 2017, tractor sales were down 0.3% y/y.