New tractor sales in South Africa fell by almost 13% in May compared with the same month last year, with 655 units sold, according to the South African Agricultural Machinery Association (Saama). In the year to date, sales are down 5.5% to 3,125.

“Tractor sales, particularly of smaller to mid-range units, have slowed in recent months. Farmers are showing caution, with more factors affecting their decision-making,” Saama said in a statement.

“In addition to crop yields and quality, commodity prices and rand exchange rates, El Niño and load shedding now need to be taken into consideration when making buying decisions. Forecasts for tractor sales for the 2023 calendar year are now that they will be between 10 and 15% down on last year.”

(Source: South African Agricultural Machinery Association)

South African agriculture has just had four consecutive seasons of generally good harvests as a consequence of a prolonged La Niña weather pattern, a cooling of the surface waters of the eastern Pacific that brings good rains to this region.

One upshot of this has been brisk sales of new tractors as commercial farmers invested in their business from the profits reaped. Last year 9,181 new tractors were sold in South Africa, 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.

Read more in Daily Maverick: South African tractor sales in 2022 reached highest level in 40 years

La Niña has now come to an end and been replaced by El Niño, which usually brings drought to southern Africa.

Read more in Daily Maverick: It’s here — El Niño has finally arrived, according to US National Weather Service 

The 2014-2016 El Niño event hammered South Africa’s agricultural sector and there are concerns that this one will be a scorcher. As a result, farmers are being cautious about their expenditure so they don’t get left high and dry.

The power crisis is also focusing minds in the field as the rolling blackouts curtail irrigation. Meanwhile, government policy, as usual, is shrouding business in a fog of uncertainty.  The National Water Act, for example, seeks to impose racial requirements for water-use licences while the weaker rand is making tractors more expensive as they are all imported. 

Interestingly, combine harvester sales are bucking this trend. In May, 65 of these monsters were sold in South Africa, a rise of more than 22% compared with the same month in 2022. In the year to date, combine harvester sales are up by more than 61% to 263.

This trend is probably a reflection of this past season’s robust harvests of summer crops such as maize. This season will see a record soya crop, and South Africa’s maize haul for 2023, according to the latest forecast from the government’s Crop Estimates Committee, is expected to be almost 16.2 million tonnes, the third-largest on record. 

One thing that is probably at play here is that the really big commercial farmers can still afford to invest in combine harvesters, which can carry price tags of up to R15-million and more. But if El Niño comes out blazing, that will probably cool demand on this front. DM