Ideal growing conditions coupled with record low interest rates and strong government incentives has seen Australian farmers’ flock to manufacturers in droves to purchase agricultural machinery ahead of harvest season.

With many in the industry expecting a strong quality harvest this year ,Commonwealth Bank has reported significant increases in applications for financing for ag machinery around the country.

New asset financing for tractors was up 119 per cent nationwide between July and October in 2020 compared to the same period in the previous financial year, while financing for harvesters rose by 108 per cent.

Queensland farmers have not been immune to this trend, with borrowing for ag machinery rising by 69 per cent.

Executive General Manager for Regional and Agribusiness at CommBank, Mr Grant Cairns, said that a perfect storm of circumstances had led to the dramatic rise in financing applications for ag machinery.

“For many of Australian’s farmers, this year has been a rebound from drought with favourable growing conditions, a successful winter crop in many regions and strong optimism about yields and quality of harvest,” said Cairns.

“Agriculture confidence is at an all-time high for a number of reasons – nationally, farm values are up, commodity prices are holding firm, interest rates are at record lows, seasonal conditions have been good, there is strong consumer and trail demand for fresh produce and there’s Government incentives like the instant asset write off scheme.

“The trends we’ve been seeing signals a higher confidence across the farming sector, and that’s good for everyone – for the regional towns where the farms are located, for the whole supply chains that support our food and fibre, for the markets they sell to, and for all of us who enjoy fresh Australian produce.”

New South Wales leads the nation when it comes to finance lending for ag machinery, up a whopping 109 per cent for the July – October quarter. Following NSW is Western Australia, up 72 per cent, followed by Queensland and then Victoria, up 30 per cent.

Source: Good Fruit & Vegetables | Money flying out the door at CommBank for ag machinery purchases

27 November 2020