Farm Machinery Manufacturers
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 1,000 farm machinery manufacturers in the US sell agricultural and farm machinery and equipment through dealers and distributors. Product categories include tractors, harvesting machinery (combines, balers), commercial turf/grounds care equipment (mowers), planting, seeding, and fertilizing machinery (sprayers, soil prep machinery), related attachments, and parts.
Sales Channel Dependent On Credit
Floor plan financing is a critical element for farm machinery sales.
Highly Seasonal Sales
Because farm machinery sales are tied to the agricultural calendar, sales are highly seasonal.
Industry size & Structure
The average farm machinery manufacturer operates out of a single location, employs 61-62 workers, and generates $37 million annually.
- The farm machinery manufacturing industry consists of over 1,000 companies, employs about 61,900 workers, and generates $37 billion annually.
- The industry is highly concentrated; the top 20 companies account for 71% of total industry revenue.
- Large US-based companies include John Deere, AGCO, and Alamo Group. Most large companies have global operations with significant sales from foreign countries.
Industry Forecast
Farm Machinery Manufacturers Industry Growth
Recent Developments
Nov 23, 2024 - Plateauing Prices, Declining Sales
- Producer prices for farm machinery manufacturers stayed relatively flat in September compared to a year ago after rising 3.4% in the previous September-versus-September annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices have more or less plateaued as shipments and sales of farm machinery and equipment decline, Census Bureau data show. Employment by farm machinery manufacturers shrank 3.2% year over year in September, while average industry wages climbed 7.3% over the same period to $31.21 per hour. Low commodity prices and high interest rates have pinched farm income and caused farmers to purchase fewer tractors and other agricultural equipment. In turn, rising wages at farm machinery companies amid falling sales are squeezing manufacturer margins.
- US manufacturers have much to lose if a trade war erupts between the US and its largest trading partner Mexico, The New York Times reports. During his campaign, President-elect Donald Trump vowed to slap 25% tariffs (or higher) on all goods from Mexico unless it stopped the flow of migrants and drugs to the US. While Mexico depends heavily on trade with the US – exporting some 80% of its goods to America – it accounted for nearly 16% of overall US exports in 2022, according to the Office of the US Trade Representative. Tariffs on Mexico and China, another Trump target, would have widespread ramifications for manufacturers, making it more expensive to produce goods that use foreign components. And if other countries respond with retaliatory tariffs, it could also make it more expensive for manufacturers to export goods to foreign markets, according to Manufacturing Dive.
- Updated projections for 2024 farm income don’t look quite as gloomy as they did earlier this year, AgWeb’s Farm Journal reports, citing new data from the USDA’s Economic Research Service (ERS). New ERS numbers show that net cash farm income for 2024 will fall by about $12 billion, down about 7% from 2023, and net farm income will fall by $6.5 billion or 4.4%. That’s compared to ERS projections released in February that suggested net farm income would fall 26%. The primary cause for 2024’s decline in farm income is lower commodity prices. Cash receipts or sales are expected to fall by $27.7 billion. Farm businesses in most regions can expect to see lower average net cash income, with farmers in the heartland states being the hardest with a 23% decline. Demand for tractors, crop harvesters, and other farm equipment has plunged amid the low commodity prices and the slowing farm economy, The Wall Street Journal reported in August.
- Farm machinery giant John Deere is among those companies backing away from diversity, equity, and inclusion (DEI) efforts amid a backlash from conservatives, CNN reports. In July, the company announced it would no longer sponsor “social or cultural awareness” events, becoming the latest major US company to distance itself from DEI measures after being targeted by conservative activists. The company also posted a statement on “X” (formerly Twitter) saying it would audit all training materials “to ensure the absence of socially-motivated messages” in compliance with federal and local laws. In response, the president of the National Black Farmers Association, John Boyd, Jr., called for the resignation of Deere’s CEO and a boycott of the company. Deere’s DEI retreat followed retailer Tractor Supply’s announcement in June that it would withdraw its carbon emission reduction goals and eliminate jobs and goals focused on DEI.
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