Brexit and Covid-19 have had huge implications on trade within the EU, which combined with the war in Ukraine, are leading to longer waiting periods than ever for new farm machinery.
Add in soaring costs of production for feed, fuel and fertiliser and it’s a worrying time not only for machinery dealers but also major contractors who are dependent on good, reliable equipment.
For most who are out from dawn till dusk, and often a lot later, this year costs are significantly higher when salaries have had to be increased to maintain staff when they could earn more driving delivery vans or artic lorries. Then there are fuel prices which have doubled while net wrap has increased 60% – and that’s buying it in bulk. Last year, the biggest contractors could purchase silage wrap at £52 per roll, which this year has soared to £83, with independent farmers having to pay nearer £90 per roll. Yet, most contractors have only increased their prices by 10%.
Sourcing new machinery is also becoming a bigger headache when contractors rely on up to date equipment to ensure there are no break downs which would hamper silage/cereal quality when so many customers want them at the same time.
As it is, many contractors are having to wait several extra months for all types of machinery to include tractors, combines and forage harvesters which in turn is having a knock on effect on the second hand market.
Worse still, the shortage of new equipment is not just confined to one brand name – all makes and models are affected, according to Ayrshire-based Stuart Shuttleton of Gordons, Berryhill.
“It’s difficult sourcing all types of machinery of all makes,” said Mr Shuttleton, who is pulling out all the stops to try and manage the situation for everyone, when ‘dozens’ of new machines have not arrived when they were supposed to due to the shortage of components.
“We can get new machinery in, but it’s taking much longer than in previous years and anything from six months to a year,” he said.
“We’re quite fortunate in that we had ordered a lot, but there is still a considerable amount of new grassland equipment to come in. So far, only one of the three combines ordered and eight of the 12 forage harvesters have arrived.”
Mr Shuttleton added that one of the biggest issues was the huge increase in price of all materials, with steel ‘rocketing’ and availability causing huge concerns.
“There is not a day goes by that there’s not a price increase. Prices on average across all our suppliers could be up 20% on this time last year.”
Such is the lead in time for purchases that the firm is ordering new machinery now for next year, when normally Mr Shuttleton would look to buy future equipment for the following season in September/October.
It’s a similar situation further north too. Neil Wattie, general manager of Sellars, Oldmeldrum, which deals with several manufacturers said: “Sourcing new machinery is a huge problem.
“Anything with an engine is difficult to get. It was bad before, but the war in Ukraine has added to the problem, with all types of machinery affected due to the shortage of components. Some machinery now has to be ordered a year in advance and will make life difficult being able to source sufficient kit to sell for 2023.
“There is still plenty of enthusiasm in the market, particularly in the arable sector, and while the price of fuel, fertiliser and feed is causing some uncertainty in the livestock industry, I do think we’ll come through it. Land prices crashed in the late 1980s when interest rates soared to 15%, but by the early 1990s things were booming and the same thing will happen again,” concluded Mr Wattie.
Stephen Howarth, agricultural economist at the Agricultural Engineers Association added: We are generally seeing orders for machinery holding up well but deliveries are struggling to keep up. In surveys of our members, lead times are averaging between four and 10 months, depending on the type of machine involved. Two to three months is more typical in normal times.
“Some manufacturers have stopped taking orders for certain types of machines altogether or are only taking orders for 2023 delivery.
The impact is greatest for the largest, most complicated machines, such as harvesters, high-powered tractors and telehandlers. That is unsurprising, as the delays are due to widespread disruptions to global supply chains and machines with the most components are likely to be the worst affected. A survey of European manufacturers found that their production was, on average, about 20% below capacity due to stoppages resulting from supply shortages.
“There were some signs that things were starting to get a little better but the situation in Ukraine has complicated things further, so it’s hard to say when the bottlenecks will ease. Sales figures for this year will certainly be lower than they would otherwise have been, though.”
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