The Farm Equipment Market is estimated to grow at a CAGR of 4.04% during the forecast period, to reach a market size of USD 132.5 billion by 2025. Factors such as an increased global population, growing demand for operational efficiency, and rising mechanization have resulted in the growth of the farm equipment market.
The increase in demand for food and grain production has resulted in a substantial increase in the adoption of mechanization, which involves the use of agriculture equipment. With advancements in technology, the trend of mechanization has now reached a next level where farm tractors and other agricultural equipment are now ‘connected.’ For instance, FarmSight services by John Deere, DiGiSENSE by Mahindra & Mahindra, AFS Connect by CNH Industrial, and Fuse by AGCO Corporation are a few examples of connected solutions. Most of the farmlands in the US and European countries are now managed by precision methods, which include sensors, virtual field maps, and GPS. Based on a report published by the Department for Environment, Food & Rural Affairs (UK) in 2013, ~22% of farmlands are GPS monitored, ~20% use soil mapping, 16% follow variable rate application, and 11% go for yield mapping. This indicates the growing demand and acceptance of precision farming.
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The autonomous tractor is considered the next evolution in the farm equipment market. While the concept of autonomous tractors is in the nascent stage, renowned players such as CNH Industrial, AGCO Corporation, John Deere, and Autonomous Tractor Corporation are working aggressively with their R&D capabilities. However, industry experts have different opinions on the official launch of the autonomous tractor. The demand for autonomous tractors is likely to rise in developing as well as developed nations depending on its usage and application area.
The four-wheel drive farm tractor market is estimated to grow at the highest CAGR from 2018 to 2025. The adoption of mechanization in the agriculture industry, especially in North America and Europe, would continue to be high in the coming years. According to the CEMA aisbl –European Agricultural Machinery, North America and Europe had around 1,850 and 700 farm tractors, respectively per 1,000 farmers in 2015. Moreover, European countries have a high demand for medium and high horsepower farm tractors and thus offer growth opportunities for four-wheel tractors. With the availability of the four-wheel drive in smaller horsepower tractors, Asia Oceania countries have also started adopting four-wheel drive tractors. Thus, tractor manufacturers can reap the benefits and enhance their revenue stream by offering 4-wheel drive options in small tractors.
Increasing demand for four-wheel drive tractors, growing adoption of advanced technologies, and strategic developments and R&D activities would enable global as well as regional manufacturers, such as John Deere, CNH Industrial, AGCO, Mahindra & Mahindra, Kubota, and SDF Group, to gain business opportunities from existing as well as untapped markets in farm equipment.
Key Questions addressed by the report
- Which power output range of tractors is expected to dominate in the future?
- Based on our findings, two-wheel drive tractors hold the maximum share in the global market. Please provide your insights and future market trends.
- How are the global industry players addressing the competition from the regional and local players for different farm equipment?
- When is the autonomous tractor expected to launch?
- What is the average selling price of farm tractors for different power output range, and what are the pricing trends of this equipment?