North America Agricultural Machinery Market: Growth and Trends
The agricultural machinery market in North America is segmented by type (tractor, equipment, irrigation equipment, harvesting equipment, hay and forage equipment and other types) and by geography (United States, Canada, Mexico and the rest of North America). The report proposes the market size and forecast in value terms (in millions of US dollars) for the above segments.
The North American agricultural machinery market is forecast to post a CAGR of 7.9% during the forecast period (2022-2027).
In North America, especially in the United States, as a result of the impact of COVID-19, the tractor, cultivator and agricultural equipment manufacturing sector has experienced little problems due to labor migration and lack of raw materials during the COVID-19 period. Exports and deliveries have been interrupted due to movement restrictions and quarantines around the world. Deliveries were stopped, which led to serious losses for manufacturers and distributors.
Increasing farm consolidation, a positive economic outlook, a larger manufacturing base, and increased government support in the form of subsidies are driving sales of agricultural machinery and large-capacity equipment. Agricultural machinery manufacturers are at the forefront of changes and evolution in the agricultural sector, which has led to the emergence of a modern integrated approach to farm management. In most markets in North America, farmers are increasingly adopting advanced technologies such as precision farming systems and GPS-guided agricultural machinery that form the basis of such systems. Wider adoption of precision farming is one of the key factors that could influence the growth of the market during the forecast period.
Key Market Trends
The market is driving wider adoption and innovation in the face of growing labor shortages.
Agriculture in North America is currently undergoing a revolution due to the rapid technological development of tractors. Farm costs are inevitable with the growing demand for food crops, making tractors an inevitable part of efficient farming.
According to the Canadian Agricultural Workforce Council, Canada’s agricultural labor shortage is expected to double by 2029, resulting in a shortage of 123,000 workers. In 2017, the shortage of agricultural labor cost the country’s farmers an estimated US$2.20 billion, and the shortage is expected to widen in the coming years. This will boost sales of farm equipment as the average farm size in Canada is also growing every year.
Today, it is also worth mentioning the problems that the entire industry is facing due to the conflict in Ukraine. Many farms are faced with a shortage of potash fertilizers due to sanctions against Russia. However, there is hope that this conflict will remain local, and by 2024 the farmers will return to the desired colley.
The United States dominates the market
The United States market is dominated by the sale of low power tractors, with tractors under 40 hp. make up the bulk of the market. It is estimated that on a technologically advanced farm, one farmer can produce enough grain to feed nearly a thousand people. However, in the twentieth century this was limited to 25 people with a ratio of 1:130. Technological advances are directed towards the use of tractors in agricultural fields. Farming is one of the major occupations in the United States, where agricultural mechanization is seen as a major cause of increased productivity, sales, and exports. In addition, shorter replacement cycles of 9 years in advanced economies such as the US increase the demand for new tractors and hence drive the market in North America. For example, John Deere makes 105-140 hp tractors. in Saltillo, and CNH Industrial’s New Holland division makes tractors from 90 to 115 hp. in Querétaro. John Deere, New Holland, Valtra and Pauny are the leading tractor manufacturers.
You can buy spare parts for the maintenance of agricultural machinery on the AGA Parts website.