Agricultural machinery: Key market research findings
- Consolidation of small farms drives the market
- Tractor segment is the dominant shareholder in the market
- Key vendors—AGCO, CNH Industrial, Deere & Company, and Kubota
Technavio’s market research analysts expect the agricultural machinery market in the US to grow at a CAGR of around 4% between 2016 and 2020. The consolidation of farms in the country is the primary driving force behind growth in the market. Large farms increasingly adopt technology to minimize labor costs and capital allocations compared to smaller farms with less output. The vast areas of these lands and the capital that is largely available make large farms perfect for large-scale mechanized farming. The death of farm labor due to lack of skills and high wages across the country, improvements with respect to yield gaps, and the growth of supportive technology that is cost-effective are some of the factors that will propel growth in the agricultural machinery market in the US by 2020.
The new market research report from Technavio presents a breakdown and analysis of the agricultural machinery segments based on product.
“A gradual shift towards leasing in an ongoing trend in the agricultural machinery market in the US. A reduction in grain prices, tighter access to capital, and thinner profit margins farmers are prompting farmers to lease tractors, combines, and other equipment as leasing can significantly reduce the cost of operations. Leasing farming equipment and machinery is beneficial to small farm owners who lack finances to invest in new equipment or replace broken ones. Through leasing equipment, farmers of smaller operations can exchange outdated equipment with the latest models,” says Abhay Sinha, Lead Analyst, New Coverage, Technavio Research.
In 2015, the tractor segment dominated the agricultural machinery market in the US by occupying almost 40% of the total market share. This segment of the market is nearing saturation and is expected to witness slow growth during the forecast period. Continuous upgrading of existing tractor technologies such as alternative fuel can improve the longevity of fuel engines and lower the operating costs. Such advancements are likely to reflect positively on the tractor market in the US during the forecast period.
The key vendors in the agricultural machinery market in the US include AGCO, CNH Industrial, Deere & Company, and Kubota. With their massive infrastructure and R&D support, the international players dominate the agricultural machinery market in the US, making it difficult for regional vendors to compete in terms of reliability, technology, and price. Many of these international players are expected to expand their presence worldwide through acquisitions during the forecast period. Also, the global economic scenario is improving, creating a vast opportunity for the launch of new products, thereby, fueling the market growth.
A more detailed analysis is available in the Technavio report, Agricultural Machinery Market in the US 2016-2020.
We can customize reports by other regions and specific segments upon request.
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