Money is literally flying through the gates of the Commonwealth Bank as Australian farmers scramble for low-interest finance to buy farm machinery.
CommBank’s Executive Managing Director for Regions and Agri-Food Grant Cairns said NSW led growth with lending up 109% from July to October compared to the same period last year.
“For many Australian farmers this year has been a rebound from the drought with favorable growing conditions, a successful winter harvest in many areas and strong optimism about yields and crop quality,” said Mr Cairns said.
“Over the past few months, we have seen funding to the sector increase dramatically, in large part thanks to the purchase of farm machinery by farmers for this year’s harvest season.
“We have seen asset financing for agricultural machinery, particularly tractors and harvesters, increase significantly.”
The thirst for loans to buy farm machinery was also strong in most other states with WA up 72 percent, Queensland up 69 percent and Victoria up 30 percent.
Nationwide, financing for new assets for tractors is up 119% – the highest volumes seen in the past three years and financing for harvesters is up 108%.
October posted the highest month for tractors since September 2017.
Mr Cairns said the federal government’s expansion of the instant asset finance write-off program provided an additional incentive for farm businesses looking to capitalize on the positive outlook and grow for the future.
“Confidence in agriculture is at an all time high for a number of reasons – nationally, agricultural values are up, commodity prices are holding up, interest rates are at rock bottom levels. record, seasonal conditions have been good, consumer and retail demand is strong. fresh produce and there are government incentives like the Instant Asset Write-off program.
“The trends we’ve seen indicate higher confidence in the agricultural sector, and that’s good for everyone – for the regional towns where the farms are located, for all of the supply chains that support our food. and our fibers, for the markets they sell to, and for all of us who appreciate fresh Australian produce.
Simon Codemo of NSW’s farm equipment supplier Codemo Machinery Services (based in Griffith) said a series of factors have boosted farmers’ confidence and appetite for investment.
“We’ve seen a very big change in NSW over the last 12 months – obviously the weather and improving seasonal conditions is a big part of it.
“This weather, combined with low interest rates, stable commodity prices and the instant asset write-off program has boosted farmers’ confidence,” Codemo said.
“I have definitely seen a sales boom because of this confidence. We have seen the demand for new and used equipment increase in all areas.
“For the first time in many years, our customers are harvesting above-average yields.
“A lot of our customers are harvesting their crops right now and the yields are looking really good. “
The story Farmers rush to big bank for loans to buy farm machinery first appeared on Online farm.