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 4,600 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 -- driven by global market conditions -- affect farm income and farmers' ability to purchase new equipment.

Industry size & Structure

The average farm and garden machinery wholesaler operates out of a single location, employs about 23 workers, and generates $19.6 million in annual revenue.

    • The farm and garden machinery wholesaling industry consists of about 4,600 firms that employ about 108,600 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

                                Apr 4, 2024 - 2024 Farm Income to Fall
                                • Net farm income – a broad measure of farm profitability – is projected to decline this year compared to last, according to the latest USDA Farm Sector Income Forecast. In inflation-adjusted 2024 dollars, net farm income is forecast to fall by $43.1 billion (27.1%) from 2023 to 2024, and net cash farm income is forecast to decrease by $42.2 billion (25.8%) compared to last year. If realized, both measures in 2024 would fall below their 2003-2022 averages (in inflation-adjusted dollars). Overall, farm cash receipts are forecast to decrease by $21.2 billion (4.2%) from 2023 to $485.5 billion in 2024 in nominal dollars. Direct Government farm payments are forecast at $10.2 billion in 2024, a $1.9 billion drop from 2023. Total production expenses are forecast to increase by $16.7 billion from 2023 to $455.1 billion in 2024.
                                • The newly-released 2022 Census of Agriculture (CoA) finds the number of farms and ranches in the US fell to 1.9 million (down 7% from 2017), extending its decline, according to the USDA’s National Agricultural Statistics Service. US farms and ranches produced $543 billion in agricultural products in 2022, up from $389 billion in 2017. With farm production expenses of $424 billion, US farms had net cash income of $152 billion while average farm income rose to $79,790, per the quinquennial CoA. A total of 43% of farms had positive net cash farm income in 2022. Family-owned and operated farms accounted for 95% of all US farms with the average US farm being 445 acres. The 2022 CoA also shows that farms with internet access continued to rise from 75% in 2017 to 79% in 2022.
                                • A new California law that bans homeowners and landscaping professionals from purchasing gas-powered lawn care equipment (manufactured after Dec. 31, 2023) from retailers in the state took effect in January, reports. California is the world’s 4th-biggest economy and the first US state to phase out fossil fuel-powered landscaping tools including lawnmowers, leaf blowers, and chainsaws. The new law aims to drastically reduce harmful air quality across the state, by pushing people to use electric or battery-powered equipment instead. The carbon emissions from gas-powered lawn tools, especially lawnmowers and leaf blowers, significantly contribute to air pollution while generating excessive noise. In 2020, lawn tools emitted more than 30 million tons of CO2, according to the EPA. The ban on gasoline-powered lawn equipment in California could signify a transformative shift in the landscape of suburban America and will test Americans’ willingness to embrace cleaner technologies in their daily lives.
                                • Just 25% of US farms currently use connected equipment or devices to access data, putting them at a big disadvantage in today’s increasingly connected agricultural sector, according to a recent white paper by the Association of Equipment Manufacturers (AEM). “Without ubiquitous connectivity, the agriculture industry cannot fully embrace the new tools and technologies that will enable it to meet the productivity and sustainability demands of the future,” writes AEM. Underscoring the importance of connectivity, farm machinery giant Deere is investing billions of dollars to build out computer-assisted services for farmers and recently signed a deal with SpaceX’s Starlink business to connect tractors, seed planters, crop sprayers, and other equipment in areas that lack adequate internet service. The lack of Wi-Fi service is even greater outside the US with more than 70% of the acres farmed in Brazil lacking adequate connectivity, according to The Wall Street Journal.
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