Global Farm Equipment Rental Market Grows Steadily at a CAGR of 6.43%

Introduction

The term "farm equipment" refers to farming or agricultural machinery. Farm equipment rental is a business model and contract that provides authorized consumers with low-cost, time-limited rentals and leases of tangible agricultural tools and self-propelled equipment. Its standard components include tractors, harvesting equipment, mower conditioners, tillage systems, rotary tillers, fertilizers, and herbicides. Both parties must execute a leasing agreement with specified rules and restrictions to receive these items. Renting farm equipment eliminates initial expenditures, reduces needless maintenance expenses, and provides access to cutting-edge agricultural machinery, all of which reduce overhead costs.

Market Dynamics

High Cost of Agriculture Equipment Drives the Global Market

Agricultural equipment is one of the fundamental necessities for any agricultural endeavor. Since the early 2000s, agricultural equipment prices have increased due to the agricultural industry's shift toward precision agriculture and digitization. As a result, farmers require assistance to purchase the necessary equipment for their agricultural activity, resulting in a decline in agricultural output. The equipment price rise significantly impacts small and medium-sized producers with limited access to land. Some cultivators need help to purchase new farm equipment due to their annual output and income. According to a study by the School of Agriculture and Consumer Economics at the University of Illinois, most machinery prices grew by 7% to 9% between 2017 and 2019. Hence, farm equipment rental services allow growers to utilize the most modern farm equipment in their fields without paying the product's total price.

Rising Adoption of Modern Agricultural Equipment Creates Tremendous Opportunities

The availability of rental farm equipment makes modern, underutilized farm equipment available to farmers, expanding the utilization of modern equipment in the field. This would also increase knowledge of the specs of the new agricultural equipment and the advantages of this equipment compared to the prior equipment. In addition, the overall productivity and efficiency of the land will increase, resulting in increased production and income for the farmers. Hence, the rental farm equipment market can improve the industry's adoption of new farm equipment, boosting agricultural output. Therefore, the expansion of agricultural equipment manufacturers represents a tremendous opportunity for the farm equipment leasing sector.

Regional Analysis

Asia-Pacific is the most significant shareholder in the global farm equipment rental market and is anticipated to exhibit a CAGR of 7.37% during the forecast period. Asia-Pacific is a vital link in the global food chain. The region accounts for around 19% of worldwide food and agriculture exports and about 31% of food and agriculture imports. In addition, agriculture significantly contributes to the nation's gross domestic product in this region. Thus, advancements in agricultural technology are essential in these locations to strengthen their agricultural sectors and provide for their expanding populations. To meet the expanding need for food, farmers in the region are now focusing on improving crop yields and delivering agricultural products throughout the year. Hence, Asia-Pacific is predicted to be the leading regional agricultural equipment rental market worldwide. Governments in the Asia-Pacific area are also developing the agricultural sector and providing subsidies to farmers in some countries, such as India.

North America is estimated to exhibit a CAGR of 5.76% over the forecast period. The agriculture industry plays a huge part in the entire economy of the countries in the North American region, such as the U.S. and Mexico. The region's farmers possess land ranging from 1 hectare to over 100 hectares. So, the cost of farm equipment, such as tractors, harvesters, and sprayers, becomes a big obstacle for small and medium-sized farmers in North America. In addition, farmers can now rent any equipment they need hourly, weekly, or monthly due to the availability of agricultural rental equipment. The agricultural equipment rental industry in North America is anticipated to expand in the following years due to the presence of many providers. MacAllister Rentals, KWIPPED, Inc., and Flaman Group of Companies are among North America's most prominent agricultural rental equipment providers.

Key Highlights

• The global farm equipment rental market was valued at USD 35.38 billion in 2022. It is estimated to reach USD 61.99 billion by 2031, growing at a CAGR of 6.43% during the forecast period (2023–2031).
• Based on product, the global farm equipment rental market is segmented into tractors, harvesters, balers, sprayers, and others. The tractor segment owns the highest market and is expected to exhibit a CAGR of 6.82% over the forecast period.
• Asia-Pacific is the most significant shareholder in the global farm equipment rental market and is anticipated to exhibit a CAGR of 7.37% during the forecast period.

Competitive Players

Competitive Players

The key global farm equipment rental market players are Associated Supply Company, Inc., Cedar Street Sales & Rentals, Deere & Company, Escorts Limited, Farmease, Flaman Group of Companies, JC Bamford Excavators Ltd., KWIPPED, Inc., Mahindra & Mahindra Ltd., Messick’s, Pacific Tractor & Implement, The Pape’ Group, Inc., Titan Machinery Inc., Tractors and Farm Equipment Limited, and German Bliss Equipment Inc.

Recent Developments

Market News

• In August 2022, Sonalika Group launched its new ‘Sonalika Agro Solutions’ tractor and implemented a rental app to bridge the gap between farmers and hi-tech farm machinery, from land preparation to harvesting. The platform connects the farmers with a huge range of machinery renters that offer high-tech agricultural implements for rent within their vicinity.

Segmentation

Global Farm Equipment Rental Market: Segmentation

By Product

• Tractor
• Harvester
• Baler
• Sprayer
• Others

By Regions

• North America
• Europe
• The U.K.
• China
• Asia-Pacific
• The Middle East and Africa
• South America