United States Agricultural Equipment Industry Analysis Report 2023-2028: Assistance to Farmers Through Loans & Subsidies and High Demand for Autonomous Equipment Creates Positive Factors for Growth
DUBLIN, April 21, 2023 /PRNewswire/ -- The "U.S. Agricultural Equipment Market - Industry Analysis & Forecast 2023-2028" report has been added to ResearchAndMarkets.com's offering.
The U.S. agriculture equipment market size is growing at a CAGR of 3.52%
The penetration and adoption of farm mechanization practices across the U.S. drive the sale of new farm equipment. Agricultural implements are the major product categories of the organized agriculture market in the US. In 2022, the tractor segment accounted for the largest U.S. agricultural equipment market share.
Further, an increasing number of technologically advanced agriculture equipment and implements is the solution to save money and time and increase yields. And the government is keen on increasing the farm mechanization rate among farmers, boosting the demand and sales of new agricultural equipment. The mechanization of farms is deemed necessary for the US agriculture sector as it has the potential to improve food production and reduce the labor shortage.
Governments must adopt effective and sustainable farming practices to ensure food security and safety. While the level of agricultural mechanization is low, the country is implementing the concept of precision agriculture to increase productivity. Precision farming is a management concept under which crops are grown according to the specifications of the soil. The focus on agricultural mechanization in developing countries will increase the demand for agricultural equipment.
KEY HIGHLIGHTS
The US has over 333.2 million food consumers and is the largest food market in North America. The country witnessed a massive increase in farm mechanization in terms of agricultural and industrial productivity.
The agriculture equipment market in the US grew by 2.8% in 2022 from 2021. The increase in crop production and agricultural equipment sales was due to the favorable climate in 2022.
The US government plans schemes and initiatives to facilitate credit and improve agriculture-related operations, which will contribute to the growth of the overall value chain of the market.
MARKET TRENDS & OPPORTUNITIES
Shortage of Agricultural Laborers
The lack or unavailability of manual labor drives farmers and farm owners to invest in agriculture equipment to perform otherwise manually completed tasks, such as soil preparation for planting, furrowing, mulching, and harvesting. Southern and Eastern U.S. require intensive manual labor during soil preparation, reaping, and harvesting.
Income and growth opportunities in the non-agricultural sector, low wages in the agricultural sector, and extreme work conditions reduce the percentage of the workforce engaged in agriculture. The drastic shortage of farm laborers will increase the demand for farm machinery in the U.S. agricultural equipment market.
High Local Production Capacities in the U.S.
The US has a large domestic tractor manufacturing base. A few large market players dominate tractor manufacturing. There are around 100 manufacturing plants that supply the majority of tractors for both domestic and international markets.
Further, the availability of a cost-competitive and skilled labor force, competitive power and fuel rates, and a favorable tax regulatory system for the industry have all contributed to a favorable economic backdrop for production investments. For production, the government exempts imported and locally manufactured machinery (components of agricultural equipment) from VAT.
Farm machinery prices have remained competitive thanks to favorable conditions connected to the investment scenario and a robust historical manufacturing base. Such factors are predicted to fuel the growth of the U.S. agricultural equipment market.
High Demand for Used & Rental Agricultural Equipment
The U.S. farmers' net income drastically reduced in recent years due to a decline in commodity crop prices. Their purchasing habits changed because of their financial crisis.
Farmers with little capital to spend on machinery consider low-cost alternatives, such as used agriculture equipment, rather than buying new equipment. They find obtaining loans for new equipment more difficult due to tough credit conditions. Banks do not sanction loans toward agri-equipment purchases due to the high chances of non-repayment of loans.
The share of the second-hand agriculture equipment market in the U.S. increased as commodity crop prices fell and loans to farmers tightened.
Fendt and John Deere are among the top vendors that offer pre-certified agriculture equipment to farmers at a cost that is approximately half that of new machinery or equipment. Companies sell used equipment under their brand, which hampers new equipment sales.
VENDOR LANDSCAPE
John Deere, CNH Industrial, and AGCO dominated the U.S. agricultural equipment market with a collective market share of over 40% in 2022.
These players focus on innovation to compete in the industry and invest in developing advanced agriculture equipment technology for precision farming and machine automation. The market has many established players that provide their products for use in open fields, vineyards, and others. The threat of new vendors in the region is quite low.
This can be attributed to factors like the long replacement cycle of agricultural equipment and vendors improving their aftersales services, which increase customers' loyalty toward existing brands.
CNH Industrial, with its agriculture equipment brands Case IH and New Holland, introduced autonomous technology in agriculture equipment.
The company has already incorporated auto-steering and telematics in its agriculture equipment. John Deere equipped many agriculture equipment models with GPS, image sensors, and telematics to assist navigation. The company also equipped its S700 with features to adjust harvesting equipment according to the state of crops autonomously.
Overview
- Value Chain Analysis
- Distribution Channels for Farm Equipment
- Financing Options for Acquiring Farm Machinery
- SWOT Analysis of Us Agricultural Equipment Industry
- Government Support to Farmers
- Increasing Adoption of Precision Farming
- Agricultural Land-Holding Structures
- Import & Export Analysis
- Technological Advances
Market Opportunities & Trends
- Technological Advances in Agricultural Equipment Technology
- Swath Control and Variable Rate Technology
- High Demand for Autonomous Equipment
- Shortage of Agricultural Laborers
- Use of Energy-Efficient Agri Equipment
- High Local Production Capacities in US
Market Growth Enablers
- Assistance to Farmers Through Loans & Subsidies
- Increased Agricultural Productivity & Exports
- Increased Farm Mechanization
Market Restraints
- Lack of Awareness of Latest Innovations in Agricultural Equipment
- High Demand for Used & Rental Agri Equipment
- Climate Change Adversely Impacts Agricultural Activities
Segmentation By Equipment Type
- Tractors (Horsepower and Wheel-Drive)
- Planting Equipment (Seeder, Planter, and Transplanter)
- Tillage Equipment (Plough, Harrow, and Tiller)
- Harvesting Equipment (Tractor-Mounted Harvester, Trailed Forage Harvester, and Self-Propelled Combines)
- Mowing Equipment (Mower and Windrower)
- Sprayer
- Other Equipment (Loader and Baler)
Segmentation By Application Type
- Land Development and Seed Bed Preparation
- Sowing and Planting
- Plant Protection
- Harvesting and Threshing
- Post Harvesting
Key Vendors
- John Deere
- CNH Industrial
- AGCO
- Kubota
Other Prominent Vendors
- SDF
- JCB
- CLAAS
- Mahindra
- Foton Motor
- KIOTI
- Sonalika
- Yanmar
For more information about this report visit https://www.researchandmarkets.com/r/j1rwi4
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