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

                            Mar 23, 2023 - Laser Weed Killer
                            • A four-year-old startup is using lasers and AI-powered precision identification to spot and kill weeds, Farm Progress reports. The LaserWeeder from Seattle-based agricultural robotics startup Carbon Robotics takes a chemical-free approach to weeding that first identifies weeds on the go and kills them with a beam. It uses precise image capture combined with an advanced artificial intelligence system to precisely target and destroy weeds. It also can be used for chemical-free crop thinning. “To get the kind of accuracy and granularity to be able to put a laser at the right spot of the plant is more difficult than probably any other tools you’ve seen,” says the company’s CEO Paul Mikesell adding that the precision required for using lasers to control weeds is much higher than using a spray nozzle. The company has slated deliveries of the machines to farms in 17 US states and Canada for 2023.
                            • Rising interest rates and the strong US dollar are putting the US manufacturing sector at risk, The Wall Street Journal reported in March. New orders for manufactured goods shrank for the sixth consecutive month in February, according to surveys by the Institute for Supply Management. Also, manufacturing output is down 1.7% from its post-pandemic peak in May 2022, according to a three-month moving average of Federal Reserve data, WSJ reports. The Fed’s aggressive interest rate hikes are raising the cost of borrowing – making machinery purchases more expensive – while the strong dollar is depressing US exports. “As the Fed continues to hike, manufacturing is going to be in the crosshairs,” Jonathan Millar, senior US economist at Barclays PLC told WSJ. “It’s hard to see this sector not suffer some sort of a downturn that is more significant than what we’ve seen already.”
                            • Equipment needs are rising as more Americans move to rural areas, the Association of Equipment Manufacturers (AEM) reported in February. Since 2011, fewer people have been moving out of rural areas and more people have been moving in, according to the USDA’s Economic Research Service. And the pandemic and rise in remote work have further fueled migration to rural areas. A survey conducted by Paulsen, a South Dakota-based marketing agency that focuses on agricultural, manufacturing and rural lifestyle industries, found that approximately 56% of respondents expect that they will own 1-5 acres when they move, 32% expect a large backyard or prop under an acre, and 12% plan to own more than 5 acres. As a result, equipment needs are rising and people say they expect to purchase more equipment if they move to a rural area.
                            • Total farm tractor sales in the US declined by double digits in January, while sales of all segments of ag equipment increased in Canada, according to the latest data from the Association of Equipment Manufacturers (AEM). In the US, total ag tractor unit sales fell in January in all segments except one, with 100+hp 2WD tractors growing 22.8%. US self-propelled combine sales, however, continued its growth streak, up roughly 133% year over year. All other segments fell, with the sub-40hp segment leading January losses. Total farm tractor sales in the US for the month fell 14.1 percent versus January 2022. In Canada, combine harvesters led sales, up 180% (137 units) in January. Overall unit sales in tractors finished the month up 7%, with the 4WD segment leading the way in Canada, growing 75% for January, followed by 100+hp 2WD units up 18.6%, according to AEM.
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