The global Farm Equipment Market is projected to reach USD 113.0 billion by 2025 from an estimated USD 92.2 billion in 2020, growing at a CAGR of 4.2% during the forecast period, mainly due to attractive government policies to farmers in the form of loan waivers, credit finance, monetary aid in difficult times such as drought, pandemic such as COVID-19 etc. Increasing popularity and awareness of farm mechanization is significantly expected to drive farm equipment market. Also, developments in precision agriculture and autonomous tractors is expected to create future opportunities in farm equipment market.
The rental market is also expected to grow at a significant rate in Asia Oceania in the coming years. In Asia Oceania, particularly in developing countries, average farm sizes are small. Thus, farmers cannot afford to buy tractors or combines for small farmlands. Therefore, leasing of high-cost equipment such as balers and combine harvesters is expected to grow significantly in Asia Oceania. Tractors with 31-70 HP are expected to hold the largest share of the total rental market in the region, owing to the higher demand for small and mid-range tractors. As the region has smaller farmlands (1–10 acres), the demand for smaller and mini combines is expected to grow. High prices of these equipment make farmers reluctant to purchase them instead rent them at affordable prices.
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Four-wheel drive tractors are expected to be the fastest growing market in the farm tractor market. The demand for four-wheel drive tractors has increased, due to its advantages over two-wheel drive tractors. Four-wheel drive tractors offer better traction on wet or uneven terrain, increasing productivity and enhancing performance. These tractors can be used in different applications such as tillage, livestock operations, crop protection, mowing, hauler, loading operations, slashing, scraping, and air seeding, where driving is not limited to the construction of rows. Compatibility and flexibility with various high-powered implements are expected to drive the demand for four-wheel drive tractors in the coming years. However, high-cost of four-wheel drive tractors may act as a restraint in cost-sensitive countries mainly in Asia Oceania and RoW.
Autonomous tractors are expected to be launched in the market by 2022. Various key players are working on developing autonomous tractors lineup for the market. <30 HP autonomous tractors is expected to be the fastest growing market in the autonomous tractors segment. Tractors with <30 HP are small tractors used for the production of crops such as grapes and strawberry. The low weight of these tractors reduces the soil compaction, which boosts crop production. The low cost of these power output tractors and the presence of small-sized farms in Asia Oceania are expected to drive the <30 HP market in this region. Thus, autonomous tractors developments is likely to further boost its popularity in the coming years.
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Thus, with increasing farm mechanization, the global farm equipment is likely to witness grow significantly in the coming years. Developments in precision agriculture, autonomous tractors and increasing demand for high-powered tractors are expected to create future opportunities for key players. With Asia Oceania expected to hold the highest potential for farm equipment, players can align their strategies and new product development in accordance with the region’s market demands to tap the budding farm equipment demand potential.
Key Market Players
The farm equipment market is dominated by globally established players such as John Deere (US), CNH Industrial (The Netherlands), AGCO (US), CLAAS (Germany), Mahindra & Mahindra (India), and Kubota (Japan).
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