Farm Equipment Market Size, Share & Trends Analysis Report By Power Output (30 HP, 31-70 HP, 71-130 HP, 131-250 HP, >250 HP), By Drive Type (Two-wheel drive (2WD), Four-wheel drive (4WD)), By Functionality (Ploughing and Cultivating, Sowing and Planting, Plant Protection and Fertilizing, Harvesting and Threshing, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The Global Farm Equipment Market Size Will significantly Grow At a CAGR of 7.3% By the Forecast Period. In simple words, farm equipment is any machinery used in farming. The most common farm equipment examples include tractors, trailers, planting and cultivating implements, balers, irrigation implements, and all-terrain vehicles. Also known as "Agricultural equipment," farm equipment helps with livestock, crop production, horticulture, and floriculture. Farm equipment is used for traction and power, soil cultivation, planting, irrigation, harvesting, and post-harvest.

Agricultural equipment can be fixed on other motor vehicles or mobile, owned by or held under a lease-purchase agreement. They can be directly used in the production of farm products by a family-owned qualified farm products producer. Simpler farm equipment makes it easier for farmers to use. Farm equipment offers the advantage of doing maximum work in minimum time by reducing farming operations. Automated farm machines can work twice as fast as human workers, primarily driving the farm equipment market.

Market Dynamics

Market Driver

Farm Loan Waivers and Financial Support

Governments around the world have implemented farm loan waiver schemes to encourage farmers to buy farm equipment. The schemes aim to relieve farmers from their loans and promote farm mechanization. The governments allocate annual budgets on various subsidies to drive the agricultural sector. Credit finance helps farmers to purchase expensive farm equipment such as tractors, combines, and harvesters. Thus, the increase in government support to help farmers adopt modern farming equipment to increase food production is significantly driving the farm equipment market.

The U.S. Farm Service Agency (FSA) provides guaranteed and direct farm ownership and operating loans to small farm owners to purchase land, livestock, equipment, feed, seed, and supplies. It helps farmers with commercial credit that they cannot obtain from a bank or any other financial institution.

Market Restraint

High Cost of Equipment

Lack of R&D efforts in some of the low-income countries has resulted in developing less advanced products that are inefficient in handling multiple tasks. Sophisticated farm equipment involves complex mechatronic systems that require specialized manufacturing and assembly processes. The high cost of designing, production, and distribution of the equipment is significantly hampering the overall market growth. Many small farmers are still unable to afford costly tools without any source of funding or outside help.

Small farmers' inability to invest in advanced machinery contributes to the low penetration rate of farm equipment. The reluctance of many of the emerging economies in expensive machinery leads to lower adoption, thus lower awareness of farm equipment. Moreover, developed regions, such as North America and Europe face challenges due to the unavailability and the high cost of farm labor.

Changing Emission Norms and Regulatory Mandates

Assigning emission and regulatory norms are essential for any market that increases complexity while designing components. Implementing emission norms is necessary to reduce the harmful impacts of hazardous agricultural produce on the environment. However, it may also limit the sales of construction and farm machinery. Additionally, significant investments are required in the research and development of ideal farm equipment.

Key players such as John Deere and AGCO have expressed concerns about emission regulations and are working towards their reduction.

Market Opportunity

Rise of the Concept of Localization

Farm equipment plays a critical role in the food value chain providing necessary equipment and maintenance support. As nations are rapidly shifting toward localization, producing local and consuming local, farmers and authorities develop new strategies and invest in new automation technologies to boost their productivity.

Emerging nations are coming forward to collaborate with their international counterparts and giant technology companies to invest in farm equipment, thereby propelling the market growth. Governments are also implementing tax reforms to help smaller players, which are forecasted to bolster the market during the forecast period.

Growing Trends of Precision Agriculture

The growing population is causing immense pressure on the agricultural and farming land to produce agricultural products to cater to their needs, especially in the Asian Region. This compelled farmers to focus on efficiency and productivity to drive business growth. Concepts of precision farming, agricultural analytics is rapidly emerging that predict crop behavior, monitor equipment in small and large farms, and subsequently, give them insights enabling them to make informed decisions.

Precision farming helps farmers to produce more with limited resources. It also allows farmers to improve their operational efficiency and increase production, thereby minimizing the gap between agricultural products' supply and consumption. Precision farming technology facilitates the usage of agricultural equipment, improving the yields. Farmers can leverage the advantages of the latest technology in their farms, such as drones, to enhance their productivity in the long run.

Regional Analysis

Asia-Pacific Holds the Largest Share of the Farm Equipment Market

Innovation for the utilization of machines with better fuel efficiency and improved features, shortage of farm labor due to the pandemic is expected to significantly impact the adoption rate of farm equipment in APAC in the upcoming years. There is a growing demand for high-powered tractors from the horticulture industry in India, China, and Japan. Increasing government policies and financial incentives to promote agriculture mechanization and precision agriculture are expected to propel the regional market.

North America to Hold a Significant Market Share during the Forecast Years

The growth of the North American farm equipment market is characterized by large farm sizes, government support, and the ability of the farmers or landowners to invest in advanced farm tools and equipment. Strong economic growth in regions such as The U.S., Canada, and Mexico countries is projected to drive the farm machinery industry.

The U.S. is expected to emerge as the largest market contributor in the upcoming years due to the presence of a large number of manufacturers and technology providers. The progressive evolution of various agricultural processes is estimated to spur demand for agricultural machinery in North America over the forecast period.

Segmental Analysis

>250 HP Tractors Segment to Register the Fastest Growth Rate during the Forecast Period

Europe is currently the largest market for high-powered, >250 HP tractors. These tractors are expected to grow significantly in adoption because of their high traction, high-pulling power, and the growing demand for commercial agriculture. Agri and farming equipment companies are allocating huge budgets owing to their increasing demands.

Many have launched new high-powered tractors and attracted large scale farmers to invest in them, thereby driving the segment growth. Additional benefits of the >250 HP tractors such as heavy load carrying capacity, better traction and control, and smooth cultivation is also expected to boost its popularity in the near future.

Two-Wheel (2WD) Drive Segment to Witness the Largest Market Share during the Forecast Period

Two-wheel drives tractors are expected to witness a surge in demand in the upcoming years are for sowing, pasture topping, and fertilizer spreading. The two-wheel-drive has a smaller turning circle, fewer mechanical parts, and suitable for livestock, orchard, vineyard, or crop farms. It also comes at a lower cost, which is anticipated to boost its popularity and adoption in emerging economies, such as India and China. Japan is also investing in two-wheel drive tractors in its small-sized farms due to its low price and minimum repair cost.

Harvesting and Threshing Applications Segment to Propel during the Upcoming Years

The Harvesting and Threshing application segment is anticipated to exhibit the highest CAGR of more than 10% during the forecast period. This is attributed to the rising demand for farm products, land development, plant protection, harvesting, and sowing and planting. The segment is also witnessing huge adoption of farm equipment recently due to the shortage of farm labor due to COVID-19.

Scarcity of localized labor supply in the farming sector due to the shift of people toward other jobs is also contributing to the growth of the farm equipment market for harvesting and threshing applications.

Impact of covid-19

The COVID-19 pandemic has posed a severe threat to the global food system by disrupting its long supply chains and logistics. A diverse local agriculture network can help urban areas create a more resilient food system for its residents. Furthermore, the pandemic has impacted markets and farm prices, supply chain slowdowns and shortages, farmers' health, farm workforce, and worker safety, among other disruptions. The farming sector has witnessed a sharp dip in the business, including the dealership network, and the reluctance of farmers to purchase expensive high-powered farm equipment in light of the pandemic.

The governments are slowly lifting lockdowns after months of restrictions, which is anticipated to bring the farm equipment market opportunities to grow. The opening of manufacturing facilities, international borders, and favorable monsoon conditions in equatorial regions are expected to restore the global agriculture and farming industry. Government initiatives and support to farmers are also expected to encourage the farmer's morale. The U.S. government announced a USD 19 billion relief program to farmers, including USD 16 billion in direct payments to producers this year.

Recent Developments

• In July 2020, John Deere, a manufacturer of agricultural, construction, and forestry machinery launched its new CP18E, CP24E, and CP30E cold planers. Cold planers are attachments that help operators with land repairs, leveling uneven pavement, texturing pavement, and cleaning around larger milling machines.