Global Agricultural Equipment

Report Overview

Why is farming changing rapidly?

• Technological innovation

Featuring 200 tables and 91 figures

Global demand for agricultural equipment is projected to advance 3.6% per year to $216 billion in 2028. In unit terms, the market for farm machinery (not including parts and attachments) is expected to expand 1.5% per year to 8.2 million.

In the near term, growth in real terms will be restrained by the large amount of farm machinery sold globally since 2020 and elevated equipment prices. However, market conditions are expected to improve during the latter part of the forecast period, supported by:

• rising agricultural output and an increase in international trade

• the large replacement needs of mature markets and their high levels of attachment and replacement part sales

• the growing use of more advanced, machinery-intensive farming techniques in developing areas (supported by the adoption of new regulations, industry and government initiatives, and intensifying workforce issues)

• the expansion of the world food and beverage industries, which will promote better farming practices and generate demand for farm products

Additionally, market value will be supported by the introduction of new, sophisticated farming equipment that costs more than predecessors and features a wide range of new technologies (making them more productive and efficient than predecessors).

Varying Outlooks for the Dominant US & Chinese Agricultural Equipment Markets

The US and China represent the two largest markets for agricultural equipment, accounting for a combined 37% of global demand in 2023. Going forward, the forecasts for these countries are expected to differ: 

• China is expected to see demand accelerate following its relatively poor performance during the 2018-2023 period, when cyclicality, the impact of the country’s Zero-COVID policy on its economy, and a reduction in agricultural subsidies negatively affected demand at various points in time. Gains will arise from increased agricultural output and the increasing use of higher value, more technologically advanced equipment.

• Demand growth in the US is expected to decelerate following rapid increases during the previous five-year period, when agricultural output and commodity prices increased in the wake of the initial phase of the pandemic.  Although the large amount of equipment sold recently will restrain greater gains, continued issues with labor supply and ongoing replacement sales will support demand.

Advanced Farm Tractors are Being Developed by Manufacturers around the World

The introduction of the next generation of tractors – which feature a variety of new technologies that make them much more capable and efficient than predecessors – will spur both new and replacement sales around the world. Fuel efficiency is especially important, with prototypes powered by liquefied natural gas and hydrogen power debuting since 2022, while hybrid and electric-powered models are being introduced to the market. Additionally, autonomous and specialty models are being offered as a means to assuage the intensifying workforce issues in a number of countries.

Historical Market Trends

The global agricultural equipment industry is large and exhibits cyclical growth patterns. Demand in general is impacted by a number of key factors such as:

• The agricultural sector is a critical component of every country’s economy and among the first to develop.

• The bulk of global farm machinery demand is concentrated in 20 nations, the majority of which are at later stages of economic development.

• Replacement product sales are the primary driver of growth in most mature markets, and they play a key role in large developing markets (e.g., China).

• Agricultural equipment have long lifespans, but are often replaced prematurely because of performance considerations.

Consequently, periods of strong growth that allows farmers to replace aging agricultural equipment and invest in new technologies are frequently followed by significant market moderation. This is particularly true in mature markets – like North America, Europe, and certain Asian nations (such as Japan and Australia) – where replacement product sales play a greater role in driving growth.

Other factors can positively or negatively impact the global agricultural equipment market’s growth cycles, including:

• economic conditions, levels of international trade and foreign investment, and fixed investment spending trends

• changes in the value of a country’s currency

• farming activity trends

• extent of government support for the agricultural sector

• agricultural commodity pricing trends, which significantly affect farm incomes

• increasing or decreasing availability of farm machinery, as well as changes in the cost thereof and access to financing options

• the introduction of new agricultural technologies, which can spur both new and replacement machinery sales and encourage the use of more advanced attachments and spare parts

• emissions regulations, technical and safety standards, and/or worker protections that affect the agricultural sector

Typical growth cycles lasts three to seven years in mature markets, although that range can vary. Developing nations frequently see prolonged periods of growth as operators begin to use agricultural equipment more intensively and shift toward more capable, higher-priced models. Replacement sales are a smaller driver of gains in these markets because the corresponding stocks of equipment are quite small and relatively new. At the same time, many of these nations have above average growth prospects and benefit from large inflows of foreign capital, both of which can sustain long periods of market growth.

Agricultural Equipment Demand Overview

Demand by Equipment Type

Farming tends to be a multi-stage process, so wide varieties of equipment are used. These include:

• farm tractors

• harvesting machinery

• planting and fertilizing machinery

• haying machinery

• livestock machinery

• plowing and cultivating machinery

Global demand for agricultural equipment is forecast to expand. Since most of the major product types are used by wide ranges of farming operations, sales growth patterns tend to be similar. Additionally, some machines are used in conjunction with one another regularly, such as tractors and seeders. However, demand for complete agricultural equipment, which is generally high-value, tends to be more volatile than sales of parts and attachments, as it is more strongly connected to changes in farm income and agricultural commodity prices. Sales of parts and attachments, on the other hand, are typically stronger in periods of market weakness and help to reduce the cyclicality of overall farm machinery demand.

Tractors are the world’s most widely used product. They are used extensively because of their versatility (i.e., ability to perform multiple functions) and compatibility with numerous attachments.

Harvesters are popular because mechanization makes the harvesting process considerably more efficient and productive than doing it manually. The incorporation of new technologies into recently developed harvesting equipment has made them much more capable than previous iterations. However, some crops – such as grapes – continue to see widespread use of manual techniques.

The use of the remaining product types tends to be more specialized, and is fairly equal around the world since it is largely determined by the size of the relevant end-use industry (e.g., livestock industry). The use of several kinds of machines in this category, such as irrigation systems (due to droughts and climate change) and spot sprayers (part of the rise of precision agriculture), has increased significantly in recent years.

Equipment Pricing Patterns

Price is a critical consideration when selecting agricultural equipment, given the high cost of most farm machinery and the intense competition among suppliers. Price is often the most important factor in developing countries in particular, as farmers have modest financial resources and limited access to financing.

Globally, new agricultural machinery prices are influenced by a range of factors, including:

• local availability of used and rebuilt equipment

• raw material and component availability and prices for the manufacturer

• supply and demand conditions within the local farming community

• technological trends and improvements in quality over time

• trends in local inflation and interest rates

Prices typically move in tandem for the various types of farm equipment because many of these machines use the same raw materials in their manufacture, are made by companies that offer multiple machinery types, and are affected by the same macroeconomic trends.

Report Details

This study analyzes global supply of and demand for agricultural equipment by major world region. Products covered include:

• farm tractors, including pedestrian-controlled (also referred to as two-wheel or walking), wheeled (also called four-wheel), and crawler (or tracked) tractors

• harvesting machinery, including combine harvesters

• planting and fertilizing machinery

• haying machinery

• plowing and cultivating machinery

• livestock machinery

• other agricultural equipment (e.g., irrigation equipment, sprayers)

• separately sold parts and attachments (including aftermarket engines)

Forest machinery and certain other loosely related products – such as lawn and garden equipment and commercial lawn and turf care equipment – are excluded from the scope of this study.

Historical data (2013, 2018, and 2023) and forecasts for 2028 and 2033 are provided for production, demand, and net exports of agricultural equipment in current US dollars at the manufacturers’ level. Annual data from 2020 to 2027 are also presented. Product demand at the global level is also provided in unit terms.