Agriculture Equipment Market Size, Share & COVID-19 Impact Analysis, By Equipment Type (Agriculture Tractors, Harvesting Equipment, Irrigation & Crop Processing Equipment, Agriculture Spraying & Handling Equipment, Soil Preparation & Cultivation Equipment, Others (Hay & Forage Equipment, Trailers)), By Application (Land Development, Threshing and Harvesting, Plant Protection, After Agro Processing), and Regional Forecast, 2022-2029

The global agriculture equipment market size was USD 157.89 billion in 2021 and is projected to grow from USD 168.30 billion in 2022 to USD 272.36 billion by 2029, exhibiting a CAGR of 7.1% during the forecast period. Based on our analysis, the global market exhibited an average growth of 6.2% in 2020 as compared to 2019. 

The extensive pressure to enhance the productivity of agricultural land is expected to foster over the forecast period, which will directly promote the proclivity of farmers or land operators toward the integration of automation technologies in this equipment. Additionally, the increasing scarcity of human workforce and heavy expenditure on maintenance of cattle on the jobsite in numerous countries have encouraged customers to leverage the benefits of modernized equipment in farming applications.

COVID-19 IMPACT

Supply Demand Imbalance Prompted Pricing Volatility and Short Term Disruption in Market

The disruptive impact of the COVID-19 pandemic on the global agricultural sector has been broad and flexible. In addition to the significant loss of life and lack of essential goods during the national shutdown, the global economy has suffered from extreme poverty. This has given rise to a new kind of crisis in the agricultural sector, affecting not only agriculture but also many other industries around the world. Many manufacturers, amid this trend, have shifted their focus to contributing more to frontline healthcare workers.

However, the demand side scenario witnessed a downturn due to reduction in operations in the labor-intensive construction and mining sector. On the other hand, an increased indoor time during the initial phase of the pandemic paved the way for an unprecedented growth of e-commerce and online shopping, surmounting the pressure on the existing distribution centers, warehouse management structures, and as a whole, the conventional supply chain of the manufacturers. During this time, the agricultural equipment industry mainly acts as an important bridge in the food value chain, providing essential equipment as well as supporting maintenance when needed.

The increasing concern of customers toward increment of automation and equipment-based models has created a favorable environment for the growth of the market. During the times of COVID-19, the demand for these products outweighed the supply, which indicates the increasing opportunities for the market.

LATEST TRENDS

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Smart Farming and Agriculture Industry 4.0 to Create Lucrative Business Prospect

The agriculture industry is going to be more significant than ever before in the next few years. According to the UN, by 2050, the world's population will reach 9.7 billion, which will ultimately impact the global agricultural production to grow about 69% between 2010 to 2050. Therefore, to meet this requirement, agricultural manufacturers & farmers are opting for the Internet of Things (IoT) for analytics and more production & manufacturing abilities.

In addition, farmers have started to install some of the major high-tech farming & agricultural methods and technologies to develop efficiency and productivity. For instance, numerous farmland operators are placing sensors in fields that allow them to obtain thorough maps of resources & topography in the area along with the variables such as temperature of the soil & acidity. They also have access to predict weather patterns & forecasting the climate in the coming days and weeks. Additionally, to remotely monitor their crops, livestock, and equipment, farmers can also use their smartphones along with gathering information & statistics on their livestock produce & feeding. This technology could be used for their crops and livestock to run a statistical estimation.

DRIVING FACTORS

Increasing Awareness Regarding Equipment Benefits and Favorable Government Policies Collectively Strengthening Market

Globally, the market is showing substantial traction due to growing population and the resulting need for improved productivity to meet the food demand. In addition, the increasing purchasing power of people, rapid pace of industrialization, and demand for high-quality packaged foods are boosting the market outlook in the coming years.

The growing demand for agricultural products mainly surges the demand for planting and fertilizing equipment instead of manual planting and fertilizing techniques. In addition, the planting and fertilizer equipment segment is expected to experience remarkable growth. Sprayers & self-propelled spreaders deliver more organized & faster operation along with covering a huge area each day. These machines ensure the even distribution of nutrients and protectants, helping to reduce overall costs and improve crop yields. There are numerous types of sprayers that are machine-operated and equipped with low-pressure, high-pressure, fogger, and air-carrying variants. These sprayers are available in manual, tractor-mounted, and aerial versions. Also, the towed or vehicle-mounted sprayers offer many benefits to the modern farmer, ensuring greater operational flexibility.

In addition, government agencies in several countries around the world are implementing initiatives to support the rapid adoption of agricultural mechanization. This factor is expected to positively affect the demand for agricultural tractors and harvesters in the coming years. Moreover, agriculture equipment is increasingly used in the forestry industry to transport various end-products, including freshly cut timber. Therefore, the market is expected to gain significant sales prospects from the forestry industry in the coming years.

RESTRAINING FACTORS

Heavy Initial Procurement Cost and High Expenditure on Maintenance to Boost Market Growth

The procurement and installation of this equipment come at a high initial cost. Further, utilization of such mechanization incurs a high operational cost, which reduces the profitability involved in farming operations. The involvement of multiple machines in operations also increases the complexity and intricate mode of operation, which also requires a highly skilled operator to manage and supervise these operations.

The use of agriculture equipment also increases the movement of heavy machinery across the farmland, which leads to soil compaction and might sometimes damage the crops or food products. The use of modern farming equipment sometimes encourages the farm operator to use excessive fertilizers and mechanized fertilizer spreaders, which leads to heavy use of chemical fertilizer, damaging the crops. The unavailability and delays in the repairs and servicing of the equipment increase the downtime and hinder the proper farming process required for a healthy cultivation. Some of the heavy-duty machines incur a hefty maintenance cost, and their repair work also requires massive expenditure, disturbing the financial ecosystem of the farming operations.

SEGMENTATION

By Equipment Type Analysis

Development of Novel Products and Increasing Product Diversity to Reinforce Market

Based on equipment type, the market is classified into agriculture tractors, harvesting equipment, irrigation & crop processing equipment, agriculture spraying & handling equipment, soil preparation & cultivation equipment, and others (hay & forage equipment, trailers).

In terms of equipment type, the agriculture tractors segment is projected to contribute a major share of the global market. The introduction of new, efficient, and eco-friendly tractors providing better speed of operations and reduced cost of plowing operations is considered a pivotal factor behind the growth of the market. The extensive development in terms of operational speed provides optimized operation and better efficiency to farmland operators. Moreover, the application of mechanized products provides uniform performance and streamlined quality in the operations, increasing yield.

The market is estimated to have a significant increase in sales of forage harvesters due to their effective performance and reduction in the overhead operational cost. Companies come up with the development of novel products to reinforce their sales footprints across the market. Prominent players, such as John Deere, introduced forage harvesters with rotary pickers designed for robust and reliable feeding. For instance, the HarvestLab 3000 sensor is assembled at the top of the discharge nozzle and records accurate readings of the harvested ingredients and dried-out waste as it moves down to the nozzle through the lens that is sapphire crystal. Similarly, CLAAS JAGUAR 25 offered by Claas KGaA GmbH helps to evenly cut corn and break kernels while generating high-quality silage.

By Application Analysis

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Land Development Segment to Experience Profound Growth Owing to its Demand across Industrial Sector

On the basis of application, the market is divided into land development, threshing and harvesting, plant protection, and after agro processing.

The constant increment in the requirements of farmlands across multiple regions is the critical factor behind the increment of the land development segment on the global landscape. The development and subsequent introduction of the products integrated with innovative technologies are exponentially transforming the utilization of the lands. Better distribution of fertilizers, the ability to have plantations across farmland boundaries, and field contours are also spurring sales of equipment in the global market.

In terms of market growth, the land development segment is still registering a noteworthy growth pace. Substantial focus on farmland conservation and uplifting soil qualities to increase the farm yield and land fertility is a vital factor substantiating the market growth prospects.

REGIONAL INSIGHTS

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The Asia Pacific market was valued at USD 59.23 billion in 2021 and is projected to witness an impressive CAGR of 8.3% over the forecast period. Development in the market is owed to the swift and streamlined economic development of China, India, and numerous countries within the geographical region of ASEAN, providing collective development of Asia Pacific. The increasing reliance of customers on mechanization across the developing countries in the region is another pivotal factor for the development.

The market of Asia Pacific is projected to reach USD 111.87 billion by 2029, owing to the heavy integration of electrical drives, digitalization, computer sensing, and control capabilities in equipment and machinery. China is estimated to hold the highest agriculture equipment market share as a result of tremendous opportunities for agricultural equipment manufacturers. Many established and well-known market players are executing both organic and inorganic business strategies to maintain their performance in the matured market of Japan as well as cash on the opportunities in the market of India, South Korea, Taiwan, and ASEAN countries. The companies are trying to introduce innovative products and technologies under their product portfolio to attract numerous customers.

India to Develop with a Promising Pace Due to Increasing Equipment Subsidiaries by Government Authorities

The government of India is providing subsidiaries and additional benefits to boost the procurement and application of modern equipment. The commitment of governments toward agriculture mechanization is anticipated to bolster growth prospects across the region. The heavy contribution of the agriculture sector to the GDP of the country emphasizes the importance of modernization of farming operations across the country.

For instance, in 2022, the central government of India decided to aid farmers and provide a 50% to 80% subsidy for the procurement of agriculture equipment. The government has further quoted that the integration of novel machines and equipment is extremely vital for increment in crop yield and doubling farmer income.

The strong presence of prominent companies, such as AGCO Corporation, Alamo Group Inc., Deere & Company, and Valmont Industries, across the U.S. is aiding the agricultural equipment market growth in North America. Additionally, the implicit efforts of these companies regarding technological developments through strong investments in research and development operations, strategic partnerships, acquisitions, collaborations, and joint ventures are identified as pivotal factors boosting the development potential of North America.

The GCC accounts for the major share in the market of the Middle East & Africa region, owing to the support by government agencies to elevate farming operations and incorporate modern farming techniques. Financial aid by the Kingdom of Saudi Arabia for farmers and subsidiary funding provided by the UAE government is becoming the key growth factor for propelling market development across the GCC, providing better sales of imported agriculture machinery.

For instance, the Ministry of Agriculture and Saudi Arabian Agricultural Bank (SAAB), which has the authority to grant and disburse farming loans and subsidies in the country, initiated the process of providing interest-free loans, technical services, and facilitating the duty-free import of advanced agriculture equipment and machinery.

Moreover, Brazil is projected to have the highest market share. In terms of market developments, Brazil is anticipated to depict a CAGR of 4.2%. The key growth factor of Mexico’s market is the flagship programs instituted by the government to provide easy lease and financing to small farmers.

For instance, Verónica Santillán, who works as a delegate of the Ministry of Agriculture, Livestock, Aquaculture, and Fisheries of Ecuador, has recently announced a program. Under this program, the government will waive the tax on farm machinery to make them more affordable and make mechanization more accessible for farmers in the country. Furthermore, numerous farmer associations operating in the country will provide easy, flexible, and hassle-free loans for the farm operators.

After the outbreak of COVID-19 and the potential breakdown of the food system in Europe, the European Commission has recently proposed Farm to Fork and Biodiversity Strategies to make the food system in the region more resilient and disruption-proof. According to the USDA’s Economic Research Service (ERS) research report, these strategies are expected to restrict agricultural inputs. Thus, to produce enough outputs keeping in line with the norms proposed by strategies, the farmers are most likely to realign their farming operations and are expected to rely on automated and innovative products across the regional market.

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Furthermore, the aforementioned strategy provides directives for the removal of farmlands available for agricultural use by about 10% by the end of 2030, considering the levels in 2020. So, to keep up with the production, farmland operators are likely to beef up labor in the field, and in order to increase inputs without having an extensive overhead operational cost, the operators are likely to rely on agriculture equipment over the forecast period.

KEY INDUSTRY PLAYERS

Leading Players to Focus on Enhancing R&D Capacities to Expand their Horizon

The promising share of the established market leaders can be attributed to the diverse product portfolio offerings of these key players. For instance, in November 2021, John Deere & Company launched a new mechanical grapples & material collection system for compact utility tractors. Its new frontier mechanical grapple, MG20F, delivers a rapid attach solution for quick installation & features a 544 kg lift capacity. The robust R&D infrastructure of these companies empowers them to develop and unveil modern products with the highest world standards in terms of operational efficiency and embedded technology. These companies are also working to identify on-demand machinery and manufacturing based on the current demand landscape of the market.

LIST OF KEY COMPANIES PROFILED:

• AGCO Corporation (U.S.)


• Alamo Group Inc. (U.S.)


• China National Machinery Industry Corporation (China)


• CNH Industrial N.V. (U.K.)


• CLAAS KGaA GmbH (Japan)


• Deere & Company (U.S.)


• Kubota Corporation (Japan)


• Mahindra & Mahindra (India)


• SDF S.p.A. (Italy)


• Valmont Industries Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2022: AGCO Corporation, a leading global distributor and manufacturer of agriculture equipment, machinery, and precision agriculture technology, acquired JCA Industries, Inc., which is a leading provider of autonomous software for agriculture equipment and electronic system. This acquisition will allow AGCO Corporation to utilize JCA technologies precision agriculture software in its agriculture machinery, which will improve the experience of customers of AGCO Corporation.


• January 2022: New Holland Tractors, a leading provider of heavy-duty tractors, partnered with Alamo Group. This will allow New Holland to provide a pre-dispatched package of agricultural auxiliary equipment of Alamo Group along with New Holland Tractors. Moreover, through this partnership, New Holland Tractors can expand to offer solutions in a variety of applications with complimentary tractors in one packaged deal.


• February 2022: CNH Industrial, a leading provider of agriculture technology, formed its strategic investment arm that is CNH Industrial Ventures. The new CNH Industrial Ventures will play a pioneering role in the company to accelerate its market for valuable innovations, which will boost customer experience and productivity. CNH industrial Ventures will focus on the areas such as digitization, autonomous vehicle, robotics, and other upcoming technologies.


• May 2021: AGCO Corporation, a leading provider of agriculture technology and precision technology, launched its online virtual product showroom in North America for its local customers at AGCOvirtualshowroom.com. This new operation functionality will provide better learning opportunities and engagement for its dealers and customers. The virtual store provides visitors the ability to explore AGCO’s wide brand offerings via 360-degree views of equipment, product videos, specification sheets, and brochures.


• December 2021: AGCO Corporation signs an agreement for the acquisition of Appareo Systems, LLC, which is a leading provider of software, and hardware in electronic manufacturing. With this acquisition, AGCO Corporation will be able to utilize advanced innovation of artificial intelligence, mechatronics, and automated vehicle achieved by Appareo systems for the betterment of its product portfolio.

REPORT COVERAGE

An Infographic Representation of Agriculture Equipment Market

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The global agriculture equipment market report provides a detailed analysis of the global market and focuses on key aspects such as leading companies, equipment types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights the key industry developments. In addition to the factors mentioned above, the report encompasses several factors contributing to the market growth in recent years.

Report Scope & Segmentation