Asset bubble in Australia amidst billion dollar industry growth

Presented by Pickles

Pickles creates an agriculture division to aid the supply and demand of Australian ag equipment

The Australian agricultural sector has seen a boom in produce profit over the last 2 years due to trade negotiations limiting the amount of offshore produce in circulation. Figures from Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) show an 18% increase in average farm income compared to the last financial year. Overall, the Australian agricultural sector in 2020/21 delivered a $5B increase on the record high reports of 2016/17. This growth is only expected to continue.  Agriculture is expected to grow towards a $100BN industry by 2030, which will create more jobs, and produce a higher demand for equipment. This boost to the local economy has come alongside a national asset bubble, again due to the lack of new and international items hitting the country. 

The Australian asset bubble of 2021/22 comes as a direct result of a raw material shortage and global delays in production and shipping. These delays have left a huge gap in the Australian market, which has in turn left buyers desperate for good-quality agricultural assets. This demand has placed an increased interest in the small amount of used equipment already in circulation on Australian shores.

International delays are of no small concern to the agricultural community, with reports of new assets taking several months to reach Australia, sometimes followed by lengthy processing delays. This has led to a drop in new product orders, like tractors, which have experienced a 19% drop in sales in March 2022 compared to the same time last year. Most buyers have turned their focus solely to used equipment, as it is now the most reliable and affordable way to access assets with ease and within an acceptable timeline. Given that it is estimated that 95% of the agricultural equipment used in Australia is imported, the circulation of the remaining 5% has greatly increased popularity and prices. 

The trading of ag assets has become a ballooning industry, with Pickles auctions often seeing upwards of 90% of stock bought per sale. With over 85,000 farm businesses located across Australia, it’s unsurprising that the small selection of assets available has created inflated prices. Industry sales have become first come with the biggest budget, first served.  

After watching the market continue to boom and seeing a growing need for a focused agricultural sector, Pickles created PicklesAg in 2022. While Pickles has already been a hub for industrial assets for many years, the creation of a dedicated division for agriculture opens another door to focus solely on ag national resources.