Agricultural Machinery Manufacturing
Description
Companies in this industry manufacture agricultural equipment and machinery, as well as commercial turf and lawn care equipment. Major companies include AGCO, Deere & Company, and Lindsay Corporation (all based in the US), along with CLAAS (Germany), CNH Industrial (UK), Kubota (Japan), Mahindra & Mahindra (India), and Shifeng Group and YTO Group (China).
Worldwide, the agricultural and farm machinery market size accounted for $196.5 billion in 2022 and is forecasted to reach a market size of over $485 billion by 2032 growing at a compound annual growth rate of 8.6% from 2023 to 2032, according to Globe Newswire. Europe, the US, and China are the largest markets.
The US agricultural machinery manufacturing industry includes about 1,000 companies with combined annual revenue of about $25 billion.
COMPETITIVE LANDSCAPE
Demand for agricultural machinery is driven by farm income and crop production projections for the next season and can vary highly year to year. The profitability of individual companies depends on the volume of products sold, since many manufacturing costs are fixed. Big companies have large economies of scale, especially in manufacturing tractors and combines. Small companies can be successful by making specialized equipment, especially tractor attachments. The US industry is highly concentrated: the 50 largest companies generate about 80% of revenue.
Imports of agricultural equipment, primarily from countries such as Germany, Canada, Japan, China, and Mexico make up about 80% of the US market. Exports account for about 25% US production. Major export markets include Canada, Mexico, and Australia.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include machinery and equipment, which account for about 40% of the industry revenue. Farm-type, power take-off hp, and wheel tractors account for over 20%. Other products include harvesting machinery (over 10%).
Large companies, such as Deere, AGCO, and CNH, produce a full array of products, while smaller companies generally make a single product line. Production of diesel engines is the major separator between large and small companies, because of the large amounts of capital and expertise required. Large companies have highly automated production lines and make products that can be mass-produced. Manufacturing at the low end consists of assembling parts, bolting, welding, and painting.
Steel is a major raw material in production, and steel prices can influence end product prices. Weight is not a major concern in tractor and implement design. In fact, weights are commonly placed on the front end of tractors to balance equipment on three point hitches on the rear. Because of the ruggedness requirements of farm implements, plastics aren't used extensively. Field maintainability requirements generally preclude use of aluminum, which also requires specialized equipment and expertise for welding.
Worldwide, the agricultural and farm machinery market size accounted for $196.5 billion in 2022 and is forecasted to reach a market size of over $485 billion by 2032 growing at a compound annual growth rate of 8.6% from 2023 to 2032, according to Globe Newswire. Europe, the US, and China are the largest markets.
The US agricultural machinery manufacturing industry includes about 1,000 companies with combined annual revenue of about $25 billion.
COMPETITIVE LANDSCAPE
Demand for agricultural machinery is driven by farm income and crop production projections for the next season and can vary highly year to year. The profitability of individual companies depends on the volume of products sold, since many manufacturing costs are fixed. Big companies have large economies of scale, especially in manufacturing tractors and combines. Small companies can be successful by making specialized equipment, especially tractor attachments. The US industry is highly concentrated: the 50 largest companies generate about 80% of revenue.
Imports of agricultural equipment, primarily from countries such as Germany, Canada, Japan, China, and Mexico make up about 80% of the US market. Exports account for about 25% US production. Major export markets include Canada, Mexico, and Australia.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include machinery and equipment, which account for about 40% of the industry revenue. Farm-type, power take-off hp, and wheel tractors account for over 20%. Other products include harvesting machinery (over 10%).
Large companies, such as Deere, AGCO, and CNH, produce a full array of products, while smaller companies generally make a single product line. Production of diesel engines is the major separator between large and small companies, because of the large amounts of capital and expertise required. Large companies have highly automated production lines and make products that can be mass-produced. Manufacturing at the low end consists of assembling parts, bolting, welding, and painting.
Steel is a major raw material in production, and steel prices can influence end product prices. Weight is not a major concern in tractor and implement design. In fact, weights are commonly placed on the front end of tractors to balance equipment on three point hitches on the rear. Because of the ruggedness requirements of farm implements, plastics aren't used extensively. Field maintainability requirements generally preclude use of aluminum, which also requires specialized equipment and expertise for welding.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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