Banks report farming equipment purchases at highest
Financing enquiries for equipment and machinery from Australia's booming agriculture sector is at its highest, according to new Commonwealth Bank data.
Asset financing is currently sitting at a seven-year high as March 2021 recorded the third largest month for purchases of agriculture machinery since 2014.
The machinery has ranged from transport equipment, sowing and cropping equipment, tractors and harvesters.
Tractors purchasers are up to 78 per cent and harvesters up 88 per cent, compared to the same time last year.
Queensland demand has gone up by 47 per cent, with the Western Australian the highest demand with 83 per cent.
"As farmers prepare for what is expected to be a significant winter crop production, upgrading old machinery has become a priority, with customers seeking to maximise productivity and take advantage of current government investment incentives," Commonwealth Bank's Executive General Manager of Regional and Agribusiness Grant Cairns said.
Speaking at Beef Australia, Mr Cairns said Commonwealth Bank was proud to be a major sponsor of the triennial event.
"It's a great time to be here off the back of what has been an incredibly challenging few years, drought, floods, COVID," he said.
"The recent La Nina weather has delivered rain to most pastoral regions, which has really helped grazing conditions across the country."
On the ground talking to producers on the ground, Mr Cairns said they have reporting the industry was the best it has ever been.
"There are a number of factors going into that, commodity prices are very good, land value is very strong, low interest rates, it's just fuelling tremendous confidence," he said.
There has also been a significant increase in restocking which has led to high cattle prices.
"While it has taken some time, Australia's herd rebuild is firmly underway, and that's helping prices due to high demand and ongoing competition between farmers and processors," Mr Cairns said.
"When the agricultural sector is doing well, that is good for the regions," he said.
"We are seeing that not only in Rockhampton, we are seeing that across the board."
Labour shortages and access to good labour was a regular issue customers were talking about, Mr Cairns said.
"It's a real challenge and not easily fixed given border closures, limited access to foreign labour," he said.
"Equally though, it's a tremendous opportunity for anyone living in metro to consider a move to regional Australia, given there are so many job opportunities."
Other common challenges farmers faced was access to parts and equipment and shipping delays in exporting.
"On the whole I would say certainly here in Central Queensland is peaking for our beef producers, they are feeling pretty good."
Head of Business Banking Mike Vacy-Lyle said it was great to be at Beef, connecting with clients and getting a real sense of what was happening.
"Regional Australia is out performing the metros by three times, so this is really where the growth is coming from," he said.
"To show our support, we are in Rockhampton for a long time, not just because it is a good time right now, we want to be associated with Rockhampton for many years to come.":