IMPROVED profit margins and strong grain prices have helped to fuel the increase in new tractor sales for the month of May with the latest figures from the Agricultural Engineers Association (AEA) showing a massive 21% rise compared to the same period last year.

According to the AEA some 1222 tractors over 50hp were registered last month, bringing the total registered this year to 5343 – around 5% more than in the first five months of 2017. The May 2018 sales figure was also the highest seen since 2014.

"Farmers are in a better financial position this year having had a good year last year which has continued into the start of this year due to the more favourable exchange rates and strong grain prices," said Stephen Howarth, AEA economist.

"A 20% improvement is not unusual in one month, what is good to see is the 5% improvement on the first five months of the year compared to 2017 when many of the tractors sold this year were actually registered last year."

He pointed out that the new European Tractor Mother Regulations which came into effect on January 1, 2018, set out higher safety standards for all new tractors, with the result being that some 600-700 machines were registered by dealers last December, before the legislation came into force.

As a result, many of these tractors would have been sold in 2018, which would also point to higher sales than the official 5%.

Mr Howarth highlighted that there had been a trend towards buying tractors with increased horsepower, which suggests such purchases were being made by arable producers who have also purchased more arable equipment.

This compares to grassland equipment, which he said had enjoyed a good year last year due to the increase in the milk price, but was more mixed this year.