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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                                Coronavirus Update

                                Nov 5, 2021 - Supply Chain Disruption, Deere Strike Tightens Equipment Market
                                • Coronavirus disrupted the agriculture sector by affecting demand for food, food exports, and biofuels. The US food supply chain had to quickly adapt as commercial demand (restaurants and schools) disappeared and consumer demand increased. Quarantines also hurt demand for corn-derived ethanol.
                                • US net cash farm income, a demand indicator for farm and garden machinery, is forecast to rise by $23.8 billion (21.5%) to $134.7 billion in 2021. Net cash farm income includes cash receipts from farming as well as farm-related income, such as US government payments. Cash receipts for animals and animal products in 2021 are expected to rise by $26.5 billion (16%) on higher receipts for hogs, cattle, and broilers, while crop receipts are projected to increase by $37.9 billion (19.7%) amid higher sales of corn and soybeans. Direct government payments are forecast to fall by $17.7 billion to $28 billion, a drop of more than 38%. Farm supports are expected to decline in 2021 amid less supplemental and ad hock COVID-19 relief payments compared to 2020.
                                • Various US government stimulus programs designed to aid farmers and ranchers – including provisions of the CARES Act and direct aid by the USDA – might help boost investments in farm machinery. Payments under the Coronavirus Food Assistance Program (CFAP) totaled more than $23 billion, according to the USDA. The Paycheck Protection Program (PPP) provided nearly $6 billion, according to the University of Missouri’s Food and Agriculture Policy Research Institute (FAPRI). Farmers also received assistance from Market Facilitation Program (MFP) payments. In late-December, Congress passed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act which provides $284 billion in additional funding for PPP (although the PPP ran out of money on May 11, 2021 and stopped accepting most new applications). The bill also included $13 billion in additional direct agricultural assistance. The American Rescue Plan Act that passed in March 2020 includes more than $10 billion for programs aimed at strengthening US agriculture and the food supply chain, according to analysis by the American Farm Bureau Federation. The bill includes $3.6 billion – or 35% of total agriculture appropriations – for pandemic-related food purchase and distribution. About $4 billion – or nearly 40% of the total - will provide debt forgiveness to socially disadvantaged farmers. The Farmers to Families Food Box Program funded farmers to provided boxes of meats, dairy, and produce to families in need during the pandemic. The USDA wound down the Farmers to Families Food Box program at the end of May 2021. It has been replaced by a number of existing programs, including The Emergency Food Assistance Program (TEFAP) which provides produce, meats and dairy products which are distributed to those in need by local foodbanks and other charitable organizations.
                                • Total US farm tractor sales rose 2.5% in September 2021 compared to the same month a year earlier, according to the Association of Equipment Manufacturers (AEM). Farm tractors with 100 horsepower or more saw strong growth in September with sales rising 23%. Tractors between 40 and 100 horsepower saw a sales increase of 2.4%. Demand for tractors with less than 40 horsepower grew 0.4%. Four-wheel-drive tractor sales were off 1.3%. Self-propelled combine sales increased 34.6%. September’s results suggest row-crop producers are confident about investments in large equipment amid strong commodities prices. Farm equipment manufacturers are confident that demand will remain robust over the next 12 months, according to a mid-August outlook by the AEM. Demand for harvesting equipment is expected to rise between 11% and 15%, and tractor sales are projected to increase 6% to 10%. Tillage, seeding, fertilizer, and spraying equipment should also see growth of about 6% to 10%.
                                • Farm and construction equipment manufacturer Deere’s worldwide sales in its production & precision ag segment rose 29% in fiscal Q3 2021 compared to the prior year. Sales in Deere’s small agriculture & turf segment were up 32%. In the US and Canada, Deere projects sales of large agricultural machinery in fiscal 2021 will be up about 25% over 2020. European demand is expected to rise about 20%. Deere forecasts its fiscal 2021 South American tractor and combine sales will be up about 20%. Revenue in Asia will be up significantly compared to fiscal 2020. Some industry watchers expect Deere’s fortunes to improve as farmers spend their COVID-19-related government payments on new machinery. Higher commodity prices and increased animal feed exports to China have also helped to boost farmers’ buying power. Supply chain issues resulting from the pandemic have increased Deere’s costs, as have higher raw material prices, chiefly steel. Deere believes charging higher prices for its equipment will offset its rising costs.
                                • In mid-June 2021, the USDA announced additional assistance for agricultural producers as part of the USDA’s Pandemic Assistance for Producers initiative, which was established in March. The latest move will expand CFAP payments to include timber harvesters, biofuel producers, dairy farmers and processors, livestock producers, and contract poultry growers. The program expansion also will help in cost-share initiatives for agriculture operations making the shift to organic production and extend grants for personal protective equipment (PPE). The latest round of aid aims to help farmers who were left out of or underserved by previous coronavirus-related federal aid.
                                • Some farmers are reporting that pandemic-related supply chain shortages are making it harder to get the equipment they need, and pushing prices higher, according to NBC News. A strike of 10,000 Deere workers may also be slowing equipment deliveries and tightening supplies of spare parts farmers need to keep existing equipment running. Some farmers are worried that equipment shortages could impact the harvest or the 2022 planting season. Some industry insiders report that the lack of new equipment is pushing prices for used machinery beyond what it sold for when it was new.
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