Reference no: EM131738670

PART A

The Tractor and Machinery Association of Australia held the industry’s only annual conference at the MCG on Tuesday 19th July and the buzz in the industry is one of cautious optimism. In previous years, the farm machinery industry has been challenged by technology advancements in big data, the rise of digital communication and the need for young people in the sector. Overlaid with these issues is the need to sell more equipment, maintaining profits, servicing the ever advancing technology on the machinery and all the while keeping one eye on the seasons to be favourable to the customers – the Australian farming community.

Machinery sales are in good shape – the market has grown consistently over the past 5 years and dealers and suppliers are optimistic about the coming season ahead, hoping for a favourable spring harvest. Senior Economist Justin Smirk of Westpac painted a growing economy in Australia and around the Asian region and predicts a steady interest rate environment for the foreseeable future, perhaps even slightly lower with a rate cut anticipated in the coming months. He indicated a need to further depreciate the currency to ensure favourable markets for agricultural exports, and continuing demand from China and India as wealth in these countries moves from industry to the consumer looking for household spending increases.

The issue of technology and big data was explored in a session with three young farmers – Tim Kooloos from Gippsland, Andy Tucker from the southwest, and Jonathon Dyer from the Wimmera. All agreed that they need data to improve the farming efficiencies and the information coming off their machinery is vital for that process. They all agreed that the more data the better, and that they are all willing to share as much data as the can in order to improve their knowledge and ultimately their profits. They rely on their supply chain including agronomists, consultants and machinery dealers to interpret the data and provide solutions and improvements to their current practices and are not adverse to changing their current practices if there is a better way.

Many dealers and suppliers are using a multitude of social media platforms to communicate with their audience – the farmers, and this was seen as a vital mode of engaging the communities in which these businesses reside. The traditional newspaper and magazine pages of publications like Crop Gear are still a very important method of marketing and communication and all agreed that these and online platforms are evolving and widely used among the farmers and customers of the sector.

Pete McCann of Case IH made the comment that with the advent of self steering, many farmers are sitting in the tractor cab trawling the web for information in between row turns and we as an industry are getting a lot better at using video and media feeds to better provide that information. Dealers like Matthew East of South Australia are splitting their time between online and traditional print advertising as they are both important mediums in the sector and at this stage, equally used by customers along with email and television advertising. Justin Parrot of Swayn & McCabe in Victoria also believes radio is also an effective medium, however concedes that online is where the marketing is heading.

Our industry has struggled to attract young people as they head for more attractive parts of the ag sector such as agronomy and animal nutrition, however Nigel Crawley from Rimfire Resources sees that changing. More graduates than ever are attending ag based courses and over half of them are female. The interest in technology is increasing which is placing the farm machinery sector in the framework of the thinking of graduates as a possible career path upon completion of their studies. More and more young farmers are emerging and Sam Tretheway of Sprout believes that once we take away the lifestyle and hobby farmers, the average age of an Australian farmer is now 47, not 58 as it used to be.

The general feel at this year’s conference was one of confidence and optimism for the sector. As always there are some areas of the industry doing it harder than others and none more than those impacted by the recent events of the dairy sector. Dealers in these areas are feeling the impact of reduced farmer incomes and many and concerned for their communities and people. They all believe that they will get through and agree that the longer term prospects of dairy will improve and many have been through similar downturns and know how to weather the storm. The State of the Industry presentation showed good growth in machinery sales, particularly in NSW and Qld and dealers are all reporting good demand for used equipment and many order banks are full for machinery required for the coming harvest.

REQUIRED:

Using the above information, answer the following question:

(1) Describe how you would evaluate Tractor and Machinery Association (TMA) in Australia for its contribution to Australian society and especially the farming community.

(2) Suggest an appropriate costing tool for high-tech agricultural machinery manufacturers.