AGRICULTURAL EQUIPMENT MARKET ANALYSIS

The global agricultural equipment market size is estimated to reach at US$ 132.49 billion in 2023 and is anticipated to witness a Compound Annual Growth Rate (CAGR) of 4.7% from 2023 to 2030. Agricultural equipment or equipment is the machinery used in the agriculture and farming applications. Different types of tools and equipment are used in agricultural applications such as hand tools, power tools, tractors, and more. Moreover, equipment varies according to the type of farming, i.e., organic farming and inorganic farming. Tractors, seed drill, thresher, combine harvesters, rotavators, power weeder, mowers, rakes, and balers are some of the commonly used agricultural equipment. Technological revolution and constant research and development have introduced high-functioning equipment that performs extensive amount of work efficiently.

Global Agricultural Equipment Market: Regional Insights        

In North America, especially the U.S. and Canada, has a highly mechanized and highly developed agricultural sector. The region is known for its large scale agricultural operations and extensive use of advanced agricultural equipment such as tractors, harvesters, and precision farming techniques. The presence of major manufacturers and favorable government policies supporting the agricultural industry contribute to the growth of the agricultural equipment market in the region.

Europe is also an important market for agricultural equipment. Countries such as Germany, France, and the U.K. have highly mechanized agricultural sectors due to the need to increase productivity and efficiency. Precision agriculture, smart farming technology, and the use of Unmanned Aerial Vehicles (UAVs) to monitor crops are growing in popularity in the region. There is also an increasing demand for sustainable and environment-friendly equipment such as precision planters and sprayers.

Asia Pacific is a diverse agricultural equipment market that includes countries such as China, India, Japan, and Australia. With a large agricultural population in the region, there is a growing need to modernize farming practices and increase productivity. Small farms and fragmented farms dominate the market, with an emphasis on low-cost and versatile equipment. Governments in countries, such as India and China, are encouraging mechanization and providing subsidies to farmers, further pushing the farm equipment market.

Latin America is an important agricultural equipment market, primarily driven by countries such as Brazil and Argentina. These countries have vast arable lands and are important producers of commodities such as soybeans, corn, and sugar. Demand for agricultural equipment, such as tractors, combines, and irrigation systems, is increasing as farmers strive to increase efficiency and yields. Government efforts to support the agricultural sector and favorable climate conditions contribute to the growth of the agricultural equipment market in the region.

The Middle East and Africa regions agricultural equipment market is characterized by a mix of small farms and large commercial operations. Countries, such as South Africa, Egypt, and Nigeria, have significant agricultural sectors and are witnessing the demand for equipment such as tractors, irrigation systems, and threshers. Technological advancements in precision agriculture and the need for efficient water management systems are driving the adoption of modern agricultural equipment in the region.

Figure 1: Global Agricultural Equipment Market Share (%), By Region, 2022

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Global Agricultural Equipment Market Drivers:

Increasing demand for food across the world due to rapidly growing population is expected to drive growth of the agricultural equipment market

The world population continues to grow, resulting in the increased demand for food and agricultural products. To meet the growing demand for food, farmers and farms are turning to mechanization and advanced equipment to increase productivity, reduce labor costs and increase overall efficiency. Innovative devices, such as precision farming equipment, autonomous machines, and sensor-based systems, enable farmers to optimize resource use, monitor yields, and increase yields. These technological advances are driving the adoption of agricultural equipment as farmers strive to remain competitive and maximize yields. For instance, in March 2023, Deere & Company, doing business as John Deere, a U.S.-based company that manufactures agricultural equipment, heavy equipment, forestry machinery, diesel engines, drivetrains used in heavy equipment, and lawn care equipment. John Deere Company announced the launch of its new See & Spray Ultimate autonomous sprayer. This sprayer is equipped with a variety of sensors and cameras that allow it to operate autonomously in the field.

Proactive initiatives taken by government agencies, such as subsidies and incentives, are expected to propel the agricultural equipment market

In many countries, governments offer supporting policies to farmers to purchase agricultural equipment, in order to work more efficiently. The government offers subsidies, credit schemes, subsidized interest rates, in order to boost the market growth. Governments around the world are supporting and subsidizing the agricultural sector to modernize, boost productivity, and increase food security. These efforts often include financial incentives and tax incentives for farmers to invest in agricultural equipment. Rapid technological progress has revolutionized the agricultural sector. For instance in 2023, the India government announced The PM Kisan Tractor Scheme 2023, a government effort that aims to provide financial support to farmers based in India, helping them purchase tractors. Eligible farmers receive a subsidy of up to 20% of the tractor's cost, or a maximum of US$ 609.52, whichever is less. The scheme is implemented by the state authorities. Subsidy provided by the government is directly transferred to the bank account of the applicant.

Global Agricultural Equipment Market Opportunities:

Advent of autonomous tractors is expected to offer lucrative growth opportunities for market players:

Market leaders are actively focusing on research and development activities to provide consumers with innovative and high-quality products. Some companies are introducing the next generation of autonomous tractors to take advantage of the growing market. In response to the growing market demand and technological advancements, market leaders in the agricultural equipment industry are placing significant emphasis on research and development activities. These companies are actively investing resources to develop innovative and high-quality products that meet the evolving needs of consumers. As part of their efforts, some companies are introducing the next generation of autonomous tractors, leveraging the advancements in automation and robotics. These autonomous tractors are designed to operate with minimal human intervention, utilizing advanced technologies such as GPS, sensors, and artificial intelligence. They offer increased efficiency, precision, and productivity in various farming operations, including planting, harvesting, and field maintenance. By leveraging autonomous capabilities, these tractors can navigate fields, optimize routes, and perform tasks with high accuracy, ultimately leading to improved yields and reduced operational costs for farmers. For instance, in August 2021, CNH Industrial is a multinational corporation announced the launch of its new Case IH Optum AFS Connect tractor. This tractor is equipped with a variety of connectivity farmers to monitor and control the tractor remotely.

Leasing of agricultural equipment is expected to pose significant business opportunities

Farm equipment is very expensive in most countries, so people choose to lease. You can lease a variety of agricultural equipment such as tractors, warehouses, and processing machinery. In addition, leasing offers farmers a great opportunity to use the equipment with individual modifications according to their needs. We are also able to provide farmers with the highest level of technical advice and support in the event of equipment failure. For instance in May 2021, AGCO Corporation is an American agricultural equipment manufacture announced the acquisition of Raven Industries. Raven Industries is a leading provider of precision agriculture technology. This acquisition will allow AGCO to expand its portfolio of precision agriculture products.

Global Agricultural Equipment Market Trends:

Growing trend of contract farming and committed sourcing with corporate partnership

Contract farming has emerged as a significant trend in various countries, in order to reduce migration from rural to urban areas, generate stable source of income, and get seasonal rotation of crops. In this type of farming, the farmers are contracted to plant the contractor’s crop on his land and then harvest and deliver the crop to the contractor at a pre-agreed price. According to Coherent Market Insights analysis, in Brazil, 75% of poultry production are under contract farming. Moreover, emerging economies such as Vietnam, India, Morocco, and more have developed policies for endorsing contract farming. In the U.S. and European countries, contract farming has witnessed significant growth.

Mechanized equipment

Key players in the market are involved in developing smart tractors that are equipped with advanced technologies such as GPS antenna, different attachments such as thresher, hauler, and fertilizer distributors, and better hydraulic systems. Such equipment are expected to offer more efficient performance that its contemporaries. Smart tractors are equipped with different attachments such as threshers, tractors and spreaders. These attachments increase the equipment's versatility and functionality, allowing the farmer to perform multiple operations with his single machine. Installing such attachments streamlines farming operations, reduces the need for separate machines, and optimizes resource utilization.

Global Agricultural Equipment Market- Impact of COVID-19

The COVID-19 has disrupted global supply chains, including the manufacturing and distribution of farm equipment. Lockdown measures, travel restrictions, and employee’s restrictions have created production delays, parts shortages, and logistical challenges. These disruptions are impacting equipment availability, causing potential supply chain bottlenecks and increased lead times. The pandemic has adversely affected the economy as a whole, leading to a decline in agricultural activity and investments in agricultural equipment. Facing financial insecurity, market turmoil, and limited access to credit, farmers have become cautious about capital spending. Uncertainties around the pandemic and its economic impact are delaying farmers' equipment purchase and investment decisions.

Global Agricultural Equipment Market Restraints:

Significant capital investment in machinery and equipment:

Agricultural equipment, especially modern machinery, often requires a large capital investment. The high cost of equipment can be a major obstacle, especially for small farmers and farmers in developing regions with limited financial resources. Initial investment and ongoing maintenance costs can deter potential buyers, resulting in lower adoption rates and limited market penetration. The large capital investment required for agricultural equipment includes many facets, including the initial cost of the equipment itself, training and technical support costs, and ongoing maintenance and repairs. These economic burdens can be overwhelming, especially for farmers with small landholdings or limited access to credit or financing. The inability to afford the latest machinery hinders the ability to improve productivity, efficiency and general agricultural practices.

Commodity price volatility in grains, oilseeds, livestock:

Fluctuations in the prices of commodities such as grains, oilseeds, and livestock can affect farmers' incomes and their ability to invest in agricultural equipment. During periods of low prices or market downturns, farmers may face financial constraints resulting in less equipment purchases and a more cautious approach to investment. Fluctuations in prices create uncertainty and can affect aggregate demand for farm equipment. Price volatility creates uncertainty in the agricultural sector, making it difficult for farmers to accurately forecast income and plan capital expenditures. In volatile market conditions, farmers may take a wait-and-see approach, deferring equipment purchases until commodity prices are more stable. This cautious action could lead to a slowdown in device sales and hinder market growth.                    

Figure 2: Global Agricultural Equipment Market Share (%), By Product Type, 2022

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Global Agricultural Equipment Market Segmentation:

Global Agricultural equipment Market, By Product Type:

Tractors

A major component segment of the global agricultural equipment market is the tractor. Tractors are the most versatile and widely used agricultural equipment. The global agricultural equipment market has a particular focus on tractor products, which are of great importance to the industry. Tractors play an important role on the farm as they provide power and versatility for a variety of tasks. There are different types of tractors that are, versatile tractor: These tractors are versatile and are often used for general agricultural tasks such as plowing, tilling, and transporting. Typically, the power range is 40-100 hp, suitable for small to medium farms. Row crop tractor: These tractors are specifically designed for row mounting and feature features such as adjustable wheel width and increased ground clearance. These are suitable for precision farming practices and often boast higher horsepower ratings. Garden tractor: These tractors are small and are mainly used for gardening and landscaping work. Ideal for use in residential areas and small farm operations. Compact tractor: Compact tractors are smaller in size and power than utility tractors, but are more versatile for a variety of tasks. Widely used for landscaping, small scale farming and maintenance work.

Combine Harvesters

Combine harvesters play a significant role in the agricultural equipment market, particularly in the harvesting process of crops. A combine, also known as a combine harvester or simply a combine harvester, is a versatile machine that combines multiple harvesting operations into one operation. Crops can be cut, threshed and washed in one operation. Combines are often used to harvest grains such as wheat, corn, soybeans, and rice. They efficiently harvest the crop, separate the grain from the plants, and store the grain in tanks or trailers on board while discarding the remaining material (straw and chaff). Modern combines are equipped with advanced features such as adjustable headers, automatic controls, on-board computer systems, yield monitors and GPS guidance systems. These features enable accurate harvesting, increased efficiency, and data collection for crop management.

Rotavator

Rotavators, also known as rotary tillers or rotary cultivators, are essential agricultural equipment used for soil preparation and cultivation. A rotavator is an electric machine with rotating blades or teeth that processes soil by breaking up soil, breaking up clods, and capturing organic material. These machines are commonly used for nursery bed preparation, weed control and soil aeration in various agricultural applications such as tillage, gardening and landscaping. Rotavators are available in a variety of sizes and configurations, from small walk-behind implements to large tractor-mounted models. The choice of cultivator depends on the size of the farm, soil type and the specific needs of the crop.

Power Tillers

A power tillers is a versatile machine that can power a variety of agricultural equipment operations such as: Disc plows, rotary paddlers, graders, threshers and trailers. It is lightweight and easy to operate on site in wet or dry conditions. A power tillers is a two-wheeled agricultural implement with a cultivator that provides consistent resistance to any agricultural task. In practice, they have different uses and benefits. The Power Tiller helps you prepare soil, sow seeds, plant, add fertilizers, herbicides, water and spray.

Seed Drill

A seed drill is a device used in agriculture that places crop seeds in the ground and buries them to a specified depth. This will distribute the seeds evenly. The seeder sows the seed at the correct seeding speed and depth, ensuring that the seed is covered with soil.

Thresher

A threshing machine is a machine that separates grain from crops and obtains clean grain without great loss or damage. A threshing machine or threshing machine is an agricultural implement that threshes grain, i.e., removes seeds from stems and husks. This is done by hitting the plant to drop the seeds.

Power Weeder

A power weeder is a farm implement or tool commonly used to carry out agricultural activities. Its main purpose is to replenish soil growth by improving fertility. A cultivator is an auxiliary tillage implement used in agriculture.

Global Agricultural Equipment Market: Key Developments

In June 2023, KUBOTA Corporation, a Japan-based multinational corporation, announced the launch of its new Kubota Vision Series tractors. This tractors are equipped with a variety of advanced safety features including a 360-degree camera system.

In April 2023, Mahindra&Mahindra LTD, an India-based multinational automotive manufacturing corporation, Mahindra Tractors introduced "OJA" as the new brand name for its new future-ready range of tractors from its most ambitious global tractor program, K2. The Mahindra OJA is Mahindra&Mahindra’s all-new light-weight global tractor platform, focusing on both domestic and international markets including the U.S., Japan, and South East Asia, and has been developed through close cooperation between the engineering teams of Mitsubishi Mahindra Agriculture Machinery, Japan, and Mahindra Research Valley, India, the R&D center for Mahindra’s auto and farm sectors.

In March 2023, the U.S. government announced a new program to train farmers on the use of agriculture equipment. The program will provide training on a variety of topics including safety, maintenance, and operation of agriculture equipment.

In January 5, 2023, John Deere, is an American corporation that manufactures agricultural equipment, heavy equipment, forestry machinery, diesel engines, drivetrains used in heavy equipment, and lawn care equipment, company revealed two new technologies, ExactShot and an electric excavator, that will help customers be more productive, profitable, and sustainable. ExactShot allows farmers to reduce the amount of starter fertilizer needed during planting by more than 60%. The technology uses sensors and robotics to place starter fertilizers precisely onto seeds as they are planted in the soil, rather than applying a continuous flow of fertilizer to the entire row of seeds.

Global Agricultural Equipment Market: Key Companies Insights

The global agricultural equipment market is highly competitive. This is attributed to the continuous launch of new technologies due to ongoing R&D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on the regional as well as global basis.

Some of the key players operating in the global agricultural equipment marketre AGCO Corporation, Bucher Industries AG, CLAAS KGaA mbH, CNH Industrial N.V., KUBOTA Corporation, ISEKI & CO.,LTD., Tractors and Farm Equipment Limited, SDF Group, Deere & Company., EXEL Industries, Mahindra&Mahindra Ltd., YTO Group, Kioti Tractor, Massey Ferguson. Minsk Tractor Works.

Definition:

The global agricultural equipment refers to the machinery, tools, and vehicles specifically designed and used in agricultural activities on a worldwide scale. It encompasses a wide range of equipment and devices employed in various stages of agricultural production, such as land preparation, planting, cultivation, harvesting, irrigation, pest control, and livestock management.