Confidence sky high as WA farmers buy big in boom year

1 July 2021

Bankwest asset data for the past financial year has suggested confidence within Western Australia’s agriculture sector is at a five-year high, with curtailed supply failing to halt purchases hitting record totals.

Quarter 3 (Jan-Mar 2021) was the strongest for the financial year, with asset financing more than doubling year-on-year in terms of value (132% increase) and lifting 85 per cent in the volume of deals financed.

It came after a boom opening to the financial year, with Q1 (Jul-Sep 2020) recording an increase of 122 per cent in volume and 123 per cent in value year-on-year, and Q2 (Oct-Dec 2020) up 32 and 76 per cent, respectively.

Quarter 4 showed a drop-off in financing year-on-year, having fallen 35 per cent in volume and 17 per cent in value.

Bankwest analysts suggested a shifting focus to next season, combined with delays in the global supply chain for equipment, was likely behind the last quarter of the financial year finishing in the red compared to FY20.

However, despite the Mar-Jun quarter dip, FY21 was up 67 per cent in value and 34 per cent in volume year-on-year, with FY21 generating the strongest asset financing figures of the past five years.

The Top 5 assets financed across the financial year, in order of most to least common, were: seeding equipment (26% of deals); tractors (26%); harvesters (23%); spraying equipment (12%); storage/bins (5%).

Bankwest Head of Rural and Regional Banking Greg Strapp said: “This has clearly been a year in which the resilience and resolve of Western Australian farmers and the agriculture sector has shone through.

“The agriculture sector is prone to volatility based on the season, but the fact we’ve seen such strong performance across three quarters – and overall – given the global situation suggests confidence continues in regional WA.

“We’ve seen a reduction in purchases over Q4, with some assets in short supply and feedback from customers that assets such as seeding equipment ordered ahead of next season are not guaranteed to arrive in time by March.

“The ever-changing market conditions and seasonal impacts may always present challenges to WA farmers across the next financial year, but it’s clear from these figures that they enter the next 12 months with confidence.”

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