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 harvesting machinery (combines, balers); commercial turf/grounds care equipment (mowers); planting, seeding, and fertilizing machinery (sprayers, soil prep machinery); related attachments; and parts.
Highly Seasonal Sales
Because farm machinery sales are tied to the agricultural calendar, sales are highly seasonal.
Sales Channel Dependent On Credit
Floor plan financing is a critical element for farm machinery sales.
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 that employ about 61,900 workers and generate $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
Jul 23, 2024 - Prices Rise Amid Falling Sales
- Producer prices for farm machinery manufacturers inched up 1.2% in May compared to a year ago after rising 6.4% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by farm machinery manufacturers shrank 1.4% in May year over year, while average industry wages rose 7.5% over the same period to $29.88 per hour, BLS data show. Low commodity prices and rising interest rates are pinching farm income and causing farmers to purchase fewer tractors and other agricultural equipment. In turn, rising wages at farm machinery companies amid declining sales are squeezing manufacturer margins.
- 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.
- Farm equipment is piling up on dealers lots as boom times fade for machinery manufacturers, Reuters reported in May. Declining farm income, stubbornly high interest rates, and low corn and soybean prices have led to a surplus of tractors and combines. As a result, farm equipment dealers are discounting machines, suspending new orders, and auctioning off equipment at reduced prices, according to Reuters. The current oversupply of farm machinery is quite a change from 2022, when industry giants Deere and CNH struggled to meet surging demand amid record-high farm income and pandemic assistance payments that gave farmers extra money to upgrade their fleets. The inventory glut has prompted some dealers to halt new orders from companies, including CNH, AGCO, and Polaris, to try to balance supply and demand. Moreover, used agriculture machinery inventory, the bulk of machinery sold in the US, is steadily increasing, dampening demand for new machinery.
- Only 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,” AEM writes. Underscoring the importance of connectivity, farm machinery giant Deere is investing billions of dollars in building 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 Wall Street Journal reports. The lack of Wi-Fi service is even greater outside the US, with over 70% of the acres farmed in Brazil lacking adequate connectivity, per WSJ.
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