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Agriculture Equipment Market

Agriculture Equipment Market Size, Share & Trends Analysis Report By Product (Agriculture Tractors, Harvesters, Planting Equipment), By Application (Harvesting & Threshing, Sowing & Planting, Sowing & Planting, Weed Cultivation, Plant Protection), By Region - Global Insights 2022-2032

Analysis of Agriculture Equipment market covering 30 + countries including analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more

Agriculture Equipment Market Outlook (2022-2032)

The global agriculture equipment market is expected to be worth US$ 162 billion in fiscal year 2022, up from US$ 157 billion in fiscal year 2021. From 2022 to 2032, the market is expected to grow at a 4.2% CAGR, reaching a value of US$ 238 billion by the end of 2032.

Favorable weather circumstances for food production, as well as government assistance with loan waiver initiatives for producers and farmers of all income levels, are expected to boost market growth. 

The unexpected surge in demand for harvesters, tractors, and planters in H1 /2021 resulted in reduced stock levels for the OEMs and dealers in H2/2021. Furthermore, OEMs globally are also battling a semiconductor shortage as well as increased commodity prices for steel, aluminum, and other materials.

As a consequence, OEMs are unable to manage supply and demand, resulting in price increases. As a consequence, OEMs are unable to manage demand and supply allowing OEMs to raise product prices by 4% to 21% in the coming quarters of 2022, a pattern that is likely to continue until 2023.

Nevertheless, strong crop output in Asian nations, particularly in China and India, as well as the need to upgrade aged equipment, are projected to drive market expansion.

The initial high cost of agricultural equipment is expected to be one of the barriers to adoption, particularly for low-income farmers. To address such problems, the rental sector is likely to be one of the new sources of revenue for market growth. Furthermore, some start-ups are currently working on applications to enable farmers to connect with one another. These apps will also assist farmers in connecting with rental providers in their area.

Favorable government efforts are expected to fuel market expansion throughout the forecast timeframe. For example, the Russian government seeks to stimulate capital investment by offering a number of subsidies for important strategic sub-sectors such as production of meat and milk.

The Ministry of Agriculture has approved 464 projects totaling USD 4 billion, which are likely to get government support for food security and cut livestock imports. Furthermore, factors such as a scarcity of human resources as well as the availability of cheap financing and capital are expected to drive demand for several agricultural equipment in other emerging markets during the projection period.

Attributes

Details

Anticipated Base Year Value (2021)

US$ 157 Billion

Expected Market Value (2022)

US$ 162 Billion

Projected Forecast Value (2032)

US$ 238 Billion

Global Growth Rate (2022-2032)

4.2%

Market share of US (2022)

72%

CAGR of MEA (2022-2032)

2.5%

Prominent Players in The Global Market

  • AGCO Corporation
  • Escorts Group
  • Agromaster
  • ISEKI & Co. Ltd.
  • APV GmbH
  • Bellota Agrisolutions
  • CLAAS KGaAmbH
  • CNH Industrial N.V
  • Deere & Company

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2017-2021 Agriculture Equipment Market Demand Analysis Vs. Forecast 2022-2032

The global agriculture equipment market increased significantly between 2017 and 2021, reaching a value of US$ 157 billion in 2021. According to Fact.MR, a supplier of market research and competitive intelligence, the industry grew at a CAGR of 3.9% during the above mentioned historical period.

Growing mechanization in agriculture, combined with an increase in farmer income, is predicted to be a significant driver of growth. Favorable weather circumstances for food production, as well as government assistance with loan waiver initiatives for farmers of all levels of income, are expected to boost market growth.

Technologically upgraded agricultural robots, such as autonomous tractors as well as flying drones to assist farmers in producing food at low costs in order to meet the growing need for food, are expected to provide greater market growth prospects over the projection period. Given these considerations, the global farm equipment market is expected to grow rapidly in the following years, with a CAGR of 4.2% reaching US$ 238 billion by 2032.

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Prominent Growth Drivers Influencing agriculture equipment market

Precision agriculture is expected to boost the market growth.

Farm mechanization and agricultural productivity have a direct association, as per Economic Survey, since farm mechanization saves time and labor, eliminates drudgery, lowers production costs in the long run, minimizes postharvest losses, and increases crop output as well as farm income. The global agriculture industry is constantly under pressure to provide agricultural products to meet the rising population, prompting farmers to concentrate on productivity and efficiency to promote economic growth.

Precision farming is growing more popular among farmers who aim to produce more with fewer resources. This agricultural technology could successfully address the issue of increased food demand throughout geographies. This technology also enables farmers to enhance operational efficiency and boost productivity, hence reducing the supply-demand gap for agricultural commodities.

The effective use of agricultural machinery aids in increasing output and productivity by performing timely farm activities, and allowing farmers to efficiently rotate crops within the same area. Precision farming technique enhances the overall amount and quality of crops by facilitating the effective use of seeds, water, land, fertilizers, and agricultural equipment. Such developments will propel the growth of the global agricultural equipment market.

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Competitive landscape highlights only certain players
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Government Assistance in the Form of Farm Loan Waivers/ Credit Financing to Accelerate the Growth of the Agricultural Equipment Market

Farm loan waiver plans encourage farmers to purchase agricultural equipment. Governments around the world created numerous programmes to help farmers pay off their loans and support farm mechanization.

According to the Organization for Economic Cooperation and Development's (OECD) Agricultural Policy Monitoring and Evaluation, 2019, farm policies in almost 53 countries-all OECD, EU countries, and 12 key developing markets presented an average of USD 728 billion each year in direct assistance to farm owners from 2018 to 2020.

In December 2019, the Maharashtra (India) government introduced the Mahatma Phule Farm Loan Waiver Program. It also proposed a scheme called Maharashtra Agro Business Network Project (Magnet) for marginal and small fruit and vegetable growers in March 2021.

Government subsidies are critical in a country's agriculture economy. The US Farm Service Agency (FSA), for example, provides guaranteed and immediate farm ownership and operation loans to farm families who are unable to acquire commercial credit through a bank, or other lenders.

Land, cattle, feed, equipment,seed, and consumables can all be purchased with FSA loans. The USDA also launched a number of financing initiatives, including a direct farmland ownership down payment programme. The highest loan amount was raised from $250,000 to $300,000, and the insured amount for conservation loans was raised from 75% to 80%. This has considerably aided the growth of the agriculture equipment market.

What Could Possibly Hinder Agriculture Equipment Market Demand?

Emission standards and mandates that are rapidly evolving are limiting the market's expansion for agricultural equipment.

Big players like John Deere, CNH Industrial, and AGCO have voiced their worries about emission laws around the world. The adoption of emission standards may restrict the sales of agricultural equipment. Changes to emission rules necessitate considerable R&D expenditures. Every market has its own emission standards, which make it more difficult to design components, particularly engines.

The TREM IV emission regulations are expected to be effective for tractors with a power of over 50 HP as of the implementation of the BS Term IV regulations by the Indian government in the year 2022. However, TREM IIIA rules would continue to regulate a significant chunk of the entire sector (50 HP), only having an impact on 10% of the capacities of the Indian tractor market as a whole.

As a result, altering emission restrictions to satisfy governmental regulations may make it harder to sell tractors. Furthermore, it is anticipated that tighter emission standards for agricultural machinery that complies with Euro Stage IV may lead to a 10-15% price rise for this equipment. Such regulation can negatively impact the global market for agricultural equipment during 2022-2032.

Category-wise Insights

Which product type is gaining traction in the global market?

The demand for tractors is going to boom in the global market

In the year 2022, the tractors are expected to occupy 44% of the global market share. This is due to a rise in the usage of tractors for fundamental agricultural tasks like harvesting, plowing, seeding, transporting, and harrowing.

Tractors are now necessary for boosting productivity in the agriculture sector due to the manpower shortage as well as the growing population to satisfy the world's food needs. The rise has also been boosted by the promotion of farm mechanization and the expanding use of precision farming in areas like Latin America and the Asia-Pacific region.

For market players, the advent of electric tractors is expected to represent a considerable growth opportunity. The growth is attributed to the electronic tractors' cost-effectiveness as well as their great efficiency and environmental friendliness. Such factors will accelerate the need for tractors in the global agricultural equipment market during 2022-2032.

Which application segment will be using these equipment more often?

Land development as well as seedbed preparation to enhance the demand for agricultural equipment

The land development and seedbed preparation is anticipated to experience a CAGR of 5.2% from 2022 to 2032. At the same time, this segment is predicted to occupy a 28% market share in 2022. The section includes tractors, levelers, and farming equipment.

Due to a number of causes, including the need for more food driving the need for mechanized farming, the availability of technically improved tractors, and increased urbanization leading to a labor crisis compelling farmers to embrace technology, the requirement for agricultural tractors is increasing. rise. This is expected to aid in the expansion of the land development market as a whole.

In the upcoming years, demand for the agricultural equipment market is anticipated to be boosted by the use of tech-driven agricultural gear for seedbed preparation, such as robotics. Furthermore, in nations like Australia, India, and Southeast Asia, a market that is only now emerging, the demand for modern agricultural equipment is gradually increasing. Such factors will propel the usage of agricultural equipment for the purpose of land development and seedbed preparation during 2022-2032.

Region-wise Analysis

What is the outlook of the US agriculture equipment market?

Rising implementation of farm mechanization to propel the growth

According to Fact.MR, the United States was valued at US$ 36 billion in 2021 and is predicted to grow at a CAGR of more than 5.1% over the projection period. The US market is estimated to account for 72% of the global market in 2022. The quantity of big farmland is primarily driving growth, which has resulted in a considerable demand for farm mechanization. In addition, the region is increasingly employing smart combine harvesters that are fitted with monitoring tools to increase farm output.

Companies such as Deere & Company as well as Claas KGaA mbH offer sophisticated specialty tractors with maximum voltage to farm in difficult-to-access locations and handle a variety of equipment. The market is being driven by the increasing development of sophisticated machinery to improve agricultural productivity and production.

The market is experiencing an increase in the number of farmers using digitally connected vehicles to boost production. Additionally, small-scale agriculture by individuals is becoming more and more popular. For challenging applications as well as heavy-duty tasks, businesses are producing small tractors.

Growing demand for larger-capacity machinery because of large farms, rising labor costs, the integration of robotic devices along with Global Positioning Systems (GPS) in tractors and harvesters, and the increasing popularity of self-propelled machineries are all predicted to propel regional market expansion over the forecast period.

What can be expected from the MEA market for agriculture equipment?

Rising investment from other countries to boost the regional market over forecast period

With a market value of US$ 11 billion in 2021, the Middle East and Africa region is anticipated to grow at a CAGR of 2.5% during the forecast period. Prominent markets in the region include Saudi Arabia, South Africa, and the UAE. During the forecast period, there is likely to be a rise in demand for agricultural and crop production equipment in the Middle Eastern desert and semiarid nations with variable and low rainfall.

It is anticipated that rising Chinese expenditures in African nations will strengthen the continent's agriculture industry. One such case that illustrates the growing Chinese influence over the region is the recent corporate expansion of the investment company New Hope Group in Egypt.

To maintain competitive positions and provide a wide range of clients in the area, industry participants are concentrating on enhancing the usefulness of the agriculture equipment offerings. To solve issues with labor shortages, businesses are introducing new features to their product offerings. These elements are accelerating regional growth over the anticipated period.

Start-up Scenario

The new companies that have started to deal with the various kinds pog agricultural equipment have been focussed at employing smart technologies to enhance the productivity as well as the efficiency in the field.

  • Tensor Field Agriculture, situated in the United States, provides thermal weeding for several vegetable crops like lettuce and spinach. To remove weeds, it employs microdosing using extremely heated vegetable oil. The business administers these dosages in weed-infested parts of the crop field utilizing semi-autonomous devices, enabling a throughput equivalent to 40 hand weeding personnel. This saves time and money while increasing field efficiency.
  • Stout AgTech, situated in the United States, develops smart cultivators using computer vision and artificial intelligence vision. Smart Cultivator, the company's current automated cultivator, nurtures the land in a single pass, eliminating the need for synthetic chemicals in weed eradication and reducing dependence on scarce trained personnel. Stout True Vision, its patented software, gathers and analyzes photographs from the field employing deep learning algorithms.

Competitive Landscape

The competitive landscape of the market for agricultural equipment has changed as a result of product innovation, strategic mergers, and acquisitions. The front-runners are concentrating on capacity enhancements and expanding their worldwide footprint in order to make the most of lucrative prospects in developing countries.

  • In May 2021, CLAAS KGaAmbH acquired a small stake in the Dutch startup AgXeed B.V. The deal was established with the intention of developing and selling independent farming machinery.
  • In August 2021, John Deere launched the new 6155MH Tractors in an effort to broaden its customer base. These tractors offer reliability and all the field-tested efficiency that the M series does.

Key Segments Covered In The Agriculture Equipment Market Report

  • Agriculture Equipment Market By Product :

    • Tractors
    • Harvesters
    • Planting Equipment
      • Row Crop Planters
      • Air Seeders
      • Grain Drills
      • Others
    • Irrigation & Crop Processing Equipment
    • Spraying Equipment
    • Hay & Forage Equipment
    • Other
  • Agriculture Equipment Market By Application :

    • Land Development & Seed Bed Preparation
    • Sowing & Planting
    • Weed Cultivation
    • Plant Protection
    • Harvesting & Threshing
    • Post-Harvest & Agro-Processing
  • Agriculture Equipment Market By Region :

    • North America
    • Latin America
    • Europe
    • Asia Pacific
    • MEA

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The global agriculture equipment market is projected to reach a market size of US$ 238 Billion by 2032.

The global agriculture equipment market is predicted to rise with a steady 4.2% CAGR during 2022-2032.

The global agriculture equipment market is currently worth more than US$ 157 Billion.

The tractors segment is expected to have a 44% market share in 2022 and to dominate the global market from 2022 to 2032.

The land development and seedbed preparation anticipated to experience a CAGR of 5.2% from 2022 to 2032.

The US region is predicted to acquire a global market share of 72% by the end of 2022.

The MEA agriculture equipment market is expected to grow with a steady CAGR of 2.5% during 2022-2032.

During the historical period of 2017-2021, the agriculture equipment market grew at a CAGR of 3.9%.

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