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 59-60 workers, and generates $30 million annually.

    • The farm machinery manufacturing industry consists of over 1,000 companies that employ about 60,800 workers and generate $30 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
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Nov 21, 2022 - Farmland Values Hit Record Highs
                            • Small and new farmers are being priced out of the market for farmland as competition from investors and real estate developers drives up prices across the country, The New York Times reported in November. In South Dakota, farmland values surged by 18.7% from 2021 to 2022, one of the largest increases in the country, according to the most recent figures from the Agriculture Department cited by NYTs. Nationwide, values increased by 12.4% to $3,800 an acre, the highest price on record since 1970, with cropland at $5,050 an acre and pastureland at $1,650 an acre, according to the USDA. In a recent survey conducted by the National Young Farmers Coalition, young farmers said finding affordable land for purchase was the top challenge this year. Fewer farmers may translate into fewer sales for farm machinery manufacturers.
                            • Farm equipment giant John Deere has been named a CES 2023 Innovation Awards Best of Innovation honoree in the robotics and the vehicle tech and mobility categories for its fully autonomous tractor, Farm Industry News reported in November 2022. Deere launched its new autonomous 8R tractor – equipped with cameras, artificial intelligence, sensors and ultra-fast GPU processors to run with no operator in the cab – in limited places this fall with plans for a larger rollout in 2023, according to the company. Deere, which is investing billions of dollars to develop smarter machines that it says will make farming faster and more efficient, debuted its driverless tractor at the annual trade show, organized by the Consumer Technology Association, in January 2022.
                            • Equipment manufacturers in September 2022 traveled to Washington, DC to petition federal lawmakers to establish a permanent Section 301 tariff exclusion process so they can petition the Office of the US Trade Representative (USTR) to remove tariffs needed for domestic manufacturing and our national economy. Section 301 of the Trade Act of 1974 grants the USTR broad authority to investigate “unfair” foreign trade policies allegedly harming American companies and to impose tariffs or other trade restrictions to achieve the removal of those policies. According to the AEM, creating a transparent exclusion process for Section 301 tariffs would be a critical win for both large and small equipment manufacturers and boost US competitiveness abroad.
                            • Taiwan's Foxconn said it will build driverless electric tractors for California-based Monarch Tractor at a former GM assembly plant in Lordstown, Ohio, facility starting in 2023, Reuters reported. With fossil fuel combustion from agricultural machinery accounting for 6% of greenhouse gases in agriculture, manufacturers of farm machinery are under pressure from regulators in the US and Europe to electrify. The announcement comes as US makers of heavy ag machinery, including Deere & Co and AGCO, set their sights on the electric vehicle market as the US agriculture industry shifts to smart farming. Production for Monarch's battery powered MK-V series tractor is slated to begin in the first quarter of 2023, according to Foxconn, which did not disclose the cost of the tractor but said the autonomous software will be sold separately and that farmers will have to pay a monthly fee to access the services.
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