Agriculture Equipment Market Size, Share & Industry Analysis, By Equipment Type (Agriculture Tractors, Harvesting Equipment, Irrigation & Crop Processing Equipment, Agriculture Spraying & Handling Equipment, Soil Preparation & Cultivation Equipment and Others (Hay & Forage Equipment, trailers, etc.), By Application (Land Development, Threshing and Harvesting, Plant Protection, After Agro Processing), and Regional Forecast, 2019-2026

The global agriculture equipment market size stood at USD 131.25 billion in 2018 and is expected to reach USD 227.76 billion by 2026, exhibiting a CAGR of 7.2% during the forecast period.

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Agriculture equipment refers to the tools that are utilized by farmers to perform agricultural operations. The adoption of automation in this equipment is a growing trend. Agriculture machineries are equipped with Internet of Things (IoT) applications, GPS solutions, etc. that are utilized in every vertical including land development, threshing, harvesting, and soil preparation.

In addition to this, demand for agriculture equipment is growing year on year. Governmental bodies are providing appropriate interest and subsidy schemes to farmers by investing in the farm equipment business. Moreover, the materialization of contract farming has also boosted the growth of the market.

Moreover, key players are interested in endorsing equipment that are approved by international standards such as ISO 25119 Series. It was developed by the ISO technical committee ‘ISO/TC 23, Tractors and Machinery for agriculture and forestry, subcommittee SC19’. These standards are acknowledged for longer time-period and do not need any recovery time.

MARKET TRENDS

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Accelerated Adoption of Précised Technologies is Laying Foundation for Future Success

The adoption of technologies including mechanized IoT implementation, AI-based equipment, GPS enabled equipment, and flying drones are leading the agriculture equipment market trends. Agriculture equipment is now more advanced than ever and is influencing the manufacturers to develop products that could meet the end-users demand. Mechanized equipment is controlled by remote devices through the integration of IoT that help to reduce the operational cost and relative operational time.

 Sensors provide accurate data about the soil and climatic conditions that help farmers to yield the crop accordingly. Moreover, Artificial Intelligence (AI) technology has led to the implementation of robotics in agriculture such as autonomous tractors, ground-based sensors, etc. that helps in producing food at reasonable costs. This technology has immensely boosted the digitalization in agriculture sector. For instance, in September 2017, Mahindra and Mahindra introduced driverless tractor in India. The tractor is equipped with autosteer - a GPS based technology that enables it to travel along a straight line.

MARKET DRIVERS

Ease of Financing and Increasing Government Initiatives to Bolster the Market Growth

In recent years, the governmental bodies across the globe are offering low import duties, low interest rates, and various initiatives to make soil preparation and cultivation process efficient and faster. For instance, in 2018, the World Bank Group invested approximately USD 6.5 billion in IBRD/IDA commitments in agriculture sector. IBRD stands for ‘The International Bank for Reconstruction and Development’, whereas IDA stands for ‘The International Development Association.’ Government support is one of the reasons driving agriculture mechanization across the globe. Moreover, in 2018-19, India has spent near about 57,000 crores in the agriculture sector and allied industries to develop the financial system in the sector. Furthermore, number of microfinance institutions and banks has been setup across all the regions for ease of availability of credit to procure agriculture machinery. Rising incomes in developed countries have enabled farmers to spend more on agriculture machineries. These factors are ultimately boosting the market outlook of agriculture equipment across the globe.

Emergence of Contract Farming to Swell the Market

Contract farming is anticipated to bolster this market, enabling farmers to buy farm equipment such as combine harvester, zero – turn mover, tractor, etc. on rent. Contract farming has also enabled farmers to get the benefits of training and financing with the contractors. It is expected to facilitate the adoption of automated farming practices.

MARKET RESTRAINT

Rapid Urbanization across the World to be the Inhibiting Factor for Market Growth

Rapid urbanization across developed and developing countries has resulted in loss of land that can be utilized to grow crops or loss of land that is capable of being ploughed. This type of land in known as arable land. The declining area of arable land with high cost of labor retention has slowed down the growth of this market. Moreover, growing demand in construction sector in countries such as Singapore, the U.S., Kuwait, Malta, Japan, China, Hong Kong, etc. has resulted in shifting the focus of people towards job and hence, there is a lack of labor force to operate agriculture equipment.

SEGMENTATION

By Equipment Type Analysis

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 Agriculture Tractors Segment to Generate Maximum Revenue

The equipment type segment is classified into agriculture tractors, soil preparation & cultivation equipment, harvesting equipment, crop processing & irrigation equipment, spraying & handling equipment and others (Forge & Hay Equipment, trailers, etc.).

The agriculture tractors segment is a major contributor in the market of agriculture equipment. This is attributable to the constant product development that is helping to produce more food in short time. Moreover, tractors, and autonomous tractors and combines i.e. tractors with harvesting machinery and tractors with plant protection machinery are mostly utilized in preparing more land for farming even on hilly areas. For instance, in November 2017, Massey Fergusson launched MF 3700 series of tractors that are engineered for vineyard applications and fruit applications. They are also suitable for sloppy fields and hillside vineyards. The sale of agriculture tractor is expected to boost exponentially, with the main reason being growing population.

Harvesting equipment sub-segment is expected to witness substantial growth, owing to the increased preference for harvesters by the farmers to increase production. Moreover, harvesters have high fuel economy that is driving its demand in the forecast period.

Forage equipment, agriculture spraying and handling equipment segment is expected to witness steady growth, owing to the business establishments provided to farmers, especially in countries including Oman, Mexico, Uganda, Uruguay, Ethiopia, etc.

By Application Analysis

Land Development Category to Boost the Market

The application segment is categorized into land development, threshing and harvesting, plant protection, and after agro processing.

The land development category is anticipated to witness substantial growth, owing to the shortage of farm laborers. Most of the land is developed by equipment such as tractors and combine tractors. It leads to the land development in short time with more efficiency. Threshing and harvesting category is expected to witness moderate growth in the forecast period, owing to the developments in irrigation and harvesting equipment.

The plant protection and after agro processing application segments are expected to grow steadily, owing to the constant development in agriculture solutions provided by key manufacturers. For instance, in March 2019, AGCO Corporation introduced farming solutions focusing on soil preparation, harvesting, and plant protection applications.

REGIONAL ANALYSIS

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The scope of global agriculture equipment market is categorized into five regions, namely North America, Europe, Asia-Pacific, Middle East and Africa, and Latin America

 Asia-Pacific is in the best position to lead the market share of agriculture equipment, owing to strong economic growth in the countries such as China and India. This opens up investment opportunities for the prominent players. Additionally, the mechanization of farm equipment is evolving progressively that is expected to spur the demand for farm equipment over the forecast period. For instance, in India, approximately 35% of agriculture business is mechanized. This opens up the opportunity for small and marginal farmers to improve farming operations including crop yielding and harvesting through adoption of latest agricultural technologies. For instance, in December 2018, Deere & Company launched 3028 En, a new model of tractor in India. Moreover, the acceptance of contract farming and rise in farm equipment renting services have provided farmers a great opportunity to expand their land development options.

North America is expected to witness strong growth despite being having heavy mechanization of farming equipment for nearly 20 years. This growth is ascribed to the utilization of equipment with improved fuel efficiency and additional features including robotic systems and GPS. Moreover, the demand for mechanization has seen a rapid growth owing to shortage of labor. This is expected to be another driving factor for market in North America for agriculture equipments.

Europe is experiencing the steady growth as a result of increasing product output by optimizing supply chain process. Factors such as labor shortage and utilization of machines for farming will further boost the growth of the market in the forecast period. Moreover, the European market is one of the most developed markets in the world. It is driven by the presence of key manufacturers including Deere and Company, AGCO Corporation, and others. These players are consistently expanding their product offerings and merging and acquiring regional players to increase profitability. For instance, in March 2017, AGCO Corporation has acquired the forge division of Lely Group to expand the product line by offering balers and loader wagons in the European market.

Latin America and the Middle East and Africa are expected to witness substantial growth, owing to the acceptance of new business establishments by the government of countries such as Uganda, South Africa and Oman. The farmers in this region are focused on developing more land for farming and subsequently enhancing crop yielding and plant protection. Moreover, governments in these regions are taking initiatives regarding dedicated funds for promoting equipment research to come up with technology that will be suitable for small farmers, as most of them own less than five hectares of farming land.

KEY INDUSTRY PLAYERS

Prominent players have adopted strategies including mergers and acquisitions, advanced product launches, investment in research and development, etc. to sustain in the intense market competition, according to the market forecast of agriculture equipment. Moreover, these players are continuously focusing on technological advancements such as, agriculture robots, flying drones, etc. and are following equipment-manufacturing standards to remain in possible leading position in this market. For instance, AGCO Corporation launched Massey Fergusson tractors, expanding the MF5700 tractor global series.

List of Key Companies Profiled:

• Deere & Company


• AGCO Corporation


• Alamo Group Inc.


• Kubota Corporation


• Mahindra & Mahindra Ltd.


• Iseki & Co., Ltd.


• Claas KGaA mbH


• China National Machinery Industry Corporation


• Valmont Industries, Inc.


• SDF S.p.A.


• International Tractors Limited

KEY INDUSTRY DEVELOPMENTS:

• March 2020 - Kubota Corporation acquired 10% equity shares in Escorts Ltd. to expand the product life in development, manufacturing, and sourcing for the Indian and global markets.


• November 2017 – Deere & Company acquired Blue River Technology, an AI startup, for approximately USD 300million. The AI technology helps tractors to understand crops such as corn, lettuce, etc.

OVERVIEW OF THE COMPETITIVE LANDSCAPE

Major Companies Are Offering Strategic Plans to Attract End-Users

The major companies in the market are Deere & Company, Kubota Corporation, Mahindra and Mahindra, AGCO Corporation, CNH Industrial N.V. (New Holland), China National Machinery Industry Corporation. These companies are likely to hold approximately 50% of the agriculture equipment market share, owing to their strong presence across the globe.

FUTURE SCENARIO

The future of agriculture equipment is promising, along with better end-user engagement and return on investment. Implementation of innovative measuring and controlling technology in the agriculture equipment has encouraged farmers to buy the equipment through the suppliers, distributors or directly from the manufacturers. The manufacturers are shifting towards technological advancements including AI and IoT to generate more revenue and offer competitive products. The prominent players are also aiming to provide best equipment quality along with providing appropriate applications to its end-users. Therefore, this market shows potential in the future ahead.

REPORT COVERAGE

The agriculture equipment market report focuses on leading regions across the globe to offer a better understanding to end-users. Moreover, the report offers insights into the industry dynamics and analyzes technologies that are utilized at a rapid pace across the world. It also displays some of the key factors and restraints to help the readers to gain in-depth knowledge about this market.

An Infographic Representation of Agriculture Equipment Market

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