US FARM TRACTOR MARKET
In developed economies like that of the United States and Canada, most farmers and ranchers are heavily dependent on technology as means of production. Agriculture in North America is quite mechanized when compared with other countries.
The increased use of technology and advanced mechanization in this sector has resulted in an increase in farm size as well as agricultural output, therefore generating higher profits for farmers and other stakeholders.
North America’s farm tractor machinery market is therefore expected to grow at a steady rate in the upcoming years owing to a change in industrial trends as well as means of production in agriculture. Advancement in technology in this sector has led to the development of improved agricultural machinery and improvised farming techniques greatly.
This growth is attributed to rising demand for food products and increasing mechanization in the agriculture industry. Furthermore, rapid urbanization is promoting a better standard of living as more and more migrants move to cities, thus resulting in farm labor shortage and propelling the demand for alternate means of production vis-a-vis agricultural farm tractors.
Farm mechanization increased the productivity of the producer, improved the quality of the product, and reduced the hazards of operations. However, with developing technology, in the foreseeable future, driverless tractors, which use GPS maps and electronic sensors, may come into play.
The United States and Canada are the major markets in the region, but tractor sales are projected to be the fastest in Mexico. The Governments, especially in Mexico are providing subsidies to buy tractors and farm equipment to promote mechanization. This along with low-interest rates on tractor finance is expected to further boost the sales of the farm tractor.
Need for the replacement of existing machinery with advanced machines is expected to fuel the market growth. However, high cost of agricultural tractors is one of the prominent factors restricting market growth, especially in the developing economies. Similarly, taxes and import tariffs imposed by the governments of different countries are expected to hinder market growth.
US FARM TRACTOR MARKET SEGMENTATION
By End Application
- Utility: Row crop, Garden type, Orchard type, Rotary tillers, and Implement carriers.
- Horse Power: Below 40 HP, 40 HP-100 HP and Above 100 HP
- Wheel Type: Two Wheel and Four Wheel
- Plowing & Cultivating Sowing & Planting
- Plant protection & fertilization
- Harvesting & threshing
US FARM TRACTOR MARKET TRENDS
Increasing adoption of Farm Mechanization
In most of the markets in North America, farmers are increasingly adopting advanced technology, such as precision farming systems and GPS-controlled agricultural machinery. The North American market is driven by the sales of higher engine-power tractors, with tractors of power more than 40 HP contributing a major market share.
Increased farm consolidation, large production base, and greater governmental support through subsidies are driving the sales of agricultural tractor machinery.
Rising import/export activities across the globe is pushing the farmers to use techniques will result in increased agricultural output in a minimum time period thus, rising the demand for productivity and operational efficiency.
Increasing cost of Labor
Farming has traditionally been a highly-labor intensive method in agriculture. However, the continually rising real wage of farm labor had a positive impact on the demand for tractors in the region, as farmers are increasingly adopting agricultural mechanization, including tractors, as a substitute for manual labor.
As such, the rapid shrinkage of farm labor has given a boost to the tractor market, and thus, driven the demand for farm tractors.
Migration of people from rural areas to urban areas is one of the major reasons for shortage of skilled labour and increase in labour costs in the region. This growth has also resulted in increased demand for food, which has put immense pressure on the farmers to increase their production output which in turn has paved the way for the demand for agricultural tractors.
US FARM TRACTOR MARKET DRIVERS
Innovation in Technology
The market is also gaining momentum owing to the technological advancements that are revolutionizing the farming and agricultural processes.
For instance, the implementation of agricultural tractors with self-driving capabilities is expected to increase productivity and efficiency in agriculture. Companies such as CNH Industrial N.V., Escorts Limited, and Deere and Company have already launched concepts for their autonomous and electric tractors.
Government initiatives across the globe are further providing an impetus to the adoption of machineries for farming and other agricultural activities. For instance, the Canadian government has implemented the “Canadian Agricultural Loans Act” (CALA) program that provides farmers with a loan up to USD 500 thousand for purchasing land or tractor and repairing buildings.
Such initiatives, along with increasing need for operational efficiency and rise in labor cost, are expected to boost the demand for agricultural tractors over the forecast period.
The North American farm tractor machinery market is consolidated, with only few players dominating the market. Deere & Company, AGCO Corporation, CNH Industrial NV, Same Deutz-Fahr Deutschland GmbH, and Claas KGaA mbh are some of the major players operating in the market.
The companies are focusing on strengthening their base, by offering enhanced product features, competitive pricing, enhanced quality, increased scale of operation, and technological innovation.
Within the next decade, farming as we know it is expected to be revolutionized by the use of self-driving tractors and robots that can perform time-consuming tasks which are now done by humans. Market players are significantly investing in research & development to introduce technologically advanced agricultural machineries.
The advent of self-driving tractors and the use of telematics for farming are anticipated to bolster market growth. Aggressive marketing and strengthening the distribution network are major strategies adopted by key players to strengthen their market position amongst competitors.. As agricultural equipment gains enough artificial intelligence to become fully autonomous, it’s likely to change the on-farm role of machinery
The introduction of driverless agricultural tractors will offer immense growth opportunities. To make the most of the opportunities, Zero Series MoCos help commercial and non-commercial hay producers manage tight harvest windows by getting more crop cut and ready to bale.
Notable changes include the addition of the new John Deere C500, a 5-meter, center-pivot MoCo; the redesigned John Deere C400, a 4-meter, center-pivot MoCo; and Quick Change Knives, all backed by an industry-leading, 5-year cutterbar warranty. This system delivers improved cut quality and reduced ash content while promoting fast dry down through improved windrow formation.
Fendt introduced the Fendt 900 Vario MT Series track tractors. New to the expanding line of Fendt tractors for North America, 900 Vario MT tractors deliver a high level of track tractor performance, ride comfort and operating efficiency, backed by a warranty that provides reliable uptime to ensure the work gets done.
CLAAS of America announced the launch of the all-new LEXION 6000 Series straw walker combines. The new technology offers an engineered mix of efficiency, precision, and convenience that excels in crops like wheat, canola, and grass seed — all in a reliable and easily-maintained package.
|2||Scope of the report|
|7||Insights from Industry stakeholders|
|8||Cost breakdown of Product by sub-components and average profit margin|
|9||Disruptive innovation in the Industry|
|10||Technology trends in the Industry|
|11||Consumer trends in the industry|
|12||Recent Production Milestones|
|13||Component Manufacturing in US, EU and China|
|14||COVID-19 impact on overall market|
|15||COVID-19 impact on Production of components|
|16||COVID-19 impact on Point of sale|
|17||Market Segmentation, Dynamics and Forecast by Geography, 2020-2025|
|18||Market Segmentation, Dynamics and Forecast by Product Type, 2020-2025|
|19||Market Segmentation, Dynamics and Forecast by Application, 2020-2025|
|20||Market Segmentation, Dynamics and Forecast by End use, 2020-2025|
|21||Product installation rate by OEM, 2020|
|22||Incline/Decline in Average B-2-B selling price in past 5 years|
|23||Competition from substitute products|
|24||Gross margin and average profitability of suppliers|
|25||New product development in past 12 months|
|26||M&A in past 12 months|
|27||Growth strategy of leading players|
|28||Market share of vendors, 2020|
|30||Unmet needs and opportunity for new suppliers|