A total of 9,181 new tractors were sold in South Africa last year, which is almost 17% more than in 2021, and the most in 40 years. Combine harvester sales were also buoyant, with 373 sold in 2022, the most since 1985. 

“Market fundamentals, in terms of summer and winter crop prospects, look encouraging,” the South African Agricultural Machinery Association (Saama) said. It also noted that the prices for agricultural commodities were “holding up”.

This is a rare sign of confidence. Farmers are investing in their businesses — tractors and combine harvesters do not come cheap — despite mounting problems. This includes uncertainties around land reform, rising input costs, farm attacks and murders, rolling blackouts, water supply challenges and a decaying road network that is crucial for getting products to silos, feedlots and markets. 

But the weather gods pay no heed to ANC failures, and the La Niña weather system has blessed grain-growing and other South African regions with abundant rain. From such well-watered soil tractor sales spring. 

“Although we expect a mild contraction in South Africa’s agricultural gross value added for 2022, the year was generally favourable for agriculture. The interlinked industries like the agricultural machinery industry benefited from generally good activities in various commodities of the sector where farmers were in a better financial condition,” said Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa (Agbiz). 

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“The ample crop harvest of the 2021/22 production season [and the 2020/21 and 2019/20 seasons], combined with generally higher commodity prices, specifically grains and oilseeds, helped boost farmers’ incomes and, after that, their ability to procure the new agricultural machinery.”

Among other factors, this highlights the capital-intensive nature of farming in South Africa, which remains a serious barrier to entry for new and emerging farmers. 

Compared to just a few years ago, tractors and combine harvesters have become increasingly high-tech and expensive. Many new models are equipped with “precision farming” tools — or are designed to accommodate them — that enable farmers to use GPS data to precisely determine where to plough and the exact amounts of fertilisers and other inputs required for a given patch.  

This raises yields and profits, and many commercial farms would not be viable without such technology. This, in turn, enhances food security, which is linked closely to yields. 

Looking ahead, tractor sales may have reached a peak. 

“With such large tractor sales in 2022 and solid activity in the two years prior, we are inclined to believe that the 2023 agricultural machinery sales will likely be more muted than the previous season. The possible replacement rate of older machinery will likely be lower this year as the past three years saw increased new machinery sales,” Sihlobo said. 

While there are clouds of uncertainty on the horizon, Sihlobo further noted that “we believe the crop will be in reasonably good condition”.

That bodes well for farmers and even if the 2022 performance is not repeated, it can’t be bad news for tractor salespeople as well. DM/BM