Farm and Garden Machinery Wholesalers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,800 farm and garden machinery wholesalers in the US distribute machinery, equipment, and related parts used in the agricultural, farm, lawn, and garden industries. Major product categories include farm tractors; lawn and garden machinery; harvesting machinery; new land preparation, planting, and cultivating machinery; and irrigation machinery. Firms may sell new and used equipment or rent equipment. They also offer warranty, maintenance, and repair services.

Highly Seasonal Demand

Demand for farm and garden machinery is highly seasonal and affected by weather and climate.

Variability In Commodity Prices

Fluctuations in commodity prices, which are driven by global market conditions, affect farm income and the ability to purchase new equipment.

Industry size & Structure

The average farm and garden machinery wholesaler operates out of a single location, employs about 21 workers, and generates $18.7 million in annual revenue.

    • The farm and garden machinery wholesaling industry consists of about 4,800 firms that employ about 101,100 workers and generate $90 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 50% of industry revenue.
    • Wholesalers include independent dealers for major machinery manufacturers, such as John Deere and Case New Holland Industrial. A dealership group operates multiple retail locations.
    • The largest farm dealership groups include Titan Machinery (Case), RDO John Deere, Rocky Mountain Equipment (Case), and James River Equipment (John Deere).
    • Farm tractors of 40-99 horsepower account for 44% of all tractors in operation according to the USDA. Tractors of 100 or more horsepower represent 31%, followed by tractors of less than 40 horsepower at 25%. Farms are also using over 662,000 hay balers, 323,000 grain and bean combines, 64,000 forage harvesters, and 18,000 cotton pickers and strippers.
                                Industry Forecast
                                Farm and Garden Machinery Wholesalers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 17, 2023 - Rise in Rural Migration
                                • Farm and garden equipment needs are rising as more Americans move to rural areas, the Association of Equipment Manufacturers (AEM) reported in February. Since 2011, fewer people have been moving out of rural areas and more people have been moving in, according to the USDA’s Economic Research Service. And the pandemic and rise in remote work have further fueled migration to rural areas. A survey conducted by Paulsen, a South Dakota-based marketing agency that focuses on agricultural, manufacturing and rural lifestyle industries, found that approximately 56% of respondents expect that they will own 1-5 acres when they move, 32% expect a large backyard or prop under an acre, and 12% plan to own more than 5 acres. As a result, equipment needs are rising and people say they expect to purchase more equipment if they move to a rural area.
                                • Total farm tractor sales in the US declined by double digits in January, while sales of all segments of ag equipment increased in Canada, according to the latest data from the Association of Equipment Manufacturers (AEM). In the US, total ag tractor unit sales fell in January in all segments except one, with 100+hp 2WD tractors growing 22.8%. US self-propelled combine sales, however, continued its growth streak, up roughly 133% year over year. All other segments fell, with the sub-40hp segment leading January losses. Total farm tractor sales in the US for the month fell 14.1 percent versus January 2022. In Canada, combine harvesters led sales, up 180% (137 units) in January. Overall unit sales in tractors finished the month up 7%, with the 4WD segment leading the way in Canada, growing 75% for January, followed by 100+hp 2WD units up 18.6%, according to AEM.
                                • Farm machinery manufacturer John Deere in January signed a memorandum of understanding with the American Farm Bureau Federation (AFBF) that the bureau said ensures farmers can repair their own farm equipment or take it to independent repair shops, The Wall Street Journal reports. The agreement formalizes farmers’ access to diagnostic and repair codes, as well as manuals (operator, parts, service) and product guides. It also ensures farmers will be able to purchase diagnostic tools directly from the company and receive assistance from the manufacturer when ordering parts and products. As farm machinery becomes increasingly sophisticated, some farmer organizations have accused Deere and other manufacturers of using proprietary software on their equipment to restrict repair work to the manufacturers’ own dealers. The MOU between Deere and the AFBF has the potential to serve as a model for other manufacturers, according to the bureau.
                                • Farm income is expected to ease this year compared to 2022 but remain strong, The Wall Street Journal reports. High prices for crops and increased Chinese demand for crop imports are expected to boost farm income. “We expect the market environment to be similar to 2022,” the CEO of agribusiness and food company Bunge Greg Heckman said on a recent analyst call, adding “That includes a globally tight crop supply, strong demand.” Farmers are expected to increase plantings this year to capitalize on high grain prices and offset higher input costs. Corn acres are expected to surpass 90 million, up about 2% from 2022, according to Farm Progress. US net farm income is projected at $137 billion in 2023, down 16% from last year, when it hit its highest level in decades, according to a February report from the US Department of Agriculture.
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