The agricultural machinery market in the US to grow at a CAGR of 5.17% during the period 2017-2021.
Agricultural Machinery Market in the US 2017-2021, has been prepared based on an in-depth market analysis with inputs from industry experts. The report covers the market landscape and its growth prospects over the coming years. The report also includes a discussion of the key vendors operating in this market.
The latest trend gaining momentum in the market is Rise in technological innovation. Manufacturers are targeting a new customer base by providing innovative and cost-effective products that are expected to enhance the market growth during the forecast period. For instance, Europe's CNH Industrial, globally known for its IH tractor brand, revealed an autonomous concept tractor in Iowa at Farm Progress Show.
It is unmanned round the clock and uses GPS and sensor technology. The machine can be remotely controlled and monitored using devices such as a tablet. It also has a driver cabin for manually controlled in situations that are not favorable for automated control, such as commuting between fields or going through suburban or rural roads. Similarly, Deere & Company and AGCO, two rival brands, also have similar technology in their portfolios.
According to the report, one of the major drivers for this market is High labor cost and workforce scarcity. The scarcity of skilled workforce is decelerating the agriculture sector in the US. The population engaged in agriculture is gradually shifting toward the service sector or the urban job culture, due to which the remaining workforce has the leverage of the labor cost charged.
The growing labor cost has been boosted by the increasing need for labor in the agriculture industry, as agriculture is a labor-intensive and time-consuming process. Hence, the deployment of labor has become expensive as there is a shortage of localized labor supply throughout the country, due to the aging population and workforce shift toward other jobs. The average age of American farmers is estimated to be around 58 years.
Further, the report states that one of the major factors hindering the growth of this market is Fluctuating raw material prices. The price of any machinery highly depends on the price of the raw materials used. In agricultural machinery, raw materials used are mainly steel, rubber, and iron. The cost of these raw materials fluctuates at a higher rate in the international market as well as the US market. This leads to the high price of the machinery.
The increase in prices affects the preference of farmers for purchasing agricultural machinery. To maintain the sales of these machinery, manufacturers need to lower the prices, which hampers their profit margin and subsequently hampers their interest. Thus, the fluctuating price of raw materials has become a major challenge for manufacturers operating in the US market to produce efficient agricultural machinery at affordable prices.
Key Market Trends
Rise in technological innovation
Increased M&A activities
Growing demand of larger farm machinery
Shift toward sustainable agriculture practices
Establishment of combined solutions for optimized agriculture practices