South America Agricultural Machinery Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Market Size (2024) | USD 34.21 Billion |
| Market Size (2029) | USD 43.03 Billion |
| CAGR (2024 - 2029) | 4.70 % |
Major Players
*Disclaimer: Major Players sorted in no particular order |
South America Agricultural Machinery Market Analysis
The South America Agricultural Machinery Market size is estimated at USD 34.21 billion in 2024, and is expected to reach USD 43.03 billion by 2029, at a CAGR of 4.70% during the forecast period (2024-2029).
South American agriculture has traditionally relied on labor-intensive methods. However, rising farm labor wages have positively impacted the demand for agricultural machinery in the region. Farmers are increasingly adopting mechanization, such as tractors, as a substitute for manual labor. For instance, the average monthly pay of an agricultural worker in Brazil reached BRL 2,018.99 in 2023, according to a study by FGV - Fundacao Getulio Vargas.
In 2022, Argentina's farm machinery manufacturing sector expanded to over 700 companies. According to the International Trade Administration, domestic production of agricultural machinery and equipment (including seeders, sprayers, and hand tools) accounts for approximately 80 percent of total agricultural machinery demand. This robust domestic production is contributing to the growth of the agricultural machinery market in South America.
Paraguay heavily relies on Brazil for importing agricultural machinery, including autonomous tractors. The availability of affordable imports encourages higher tractor purchases and consumption in the country. The growing labor shortage and increasing farm wages are driving demand for advanced farm machinery to enhance productivity across the region.
South America Agricultural Machinery Market Trends
Increase in Area Harvested in South America
- Brazil's agricultural landscape is evolving, with farms consolidating into larger units and driving increased demand for powerful agricultural machinery. The Brazilian Institute of Geography and Statistics reported an expansion in Brazil's agricultural production area from 86.7 million hectares in 2021 to 91.1 million hectares in 2022. This consolidation trend is primarily motivated by the need to share costs associated with heavy machinery.
- Recent regional patterns show larger farms acquiring smaller ones. Urbanization plays a significant role in this shift, offering new opportunities to rural residents and prompting many to relocate to urban areas. This migration has led to a decrease in small landholdings and reduced farming profits for smaller operations. The decline in small-scale farmers results in larger landholdings, which in turn accelerates farm mechanization. This mechanization increases the demand for agricultural machinery, enabling faster cultivation of larger land areas and improving overall productivity and yields. In contrast, small-holding farmers typically focus on crop cultivation for self-consumption, limiting their use of agricultural machinery.
- Argentina and Paraguay are also experiencing growth in their crop harvest areas. According to USDA forecasts for the 2024-2025 marketing year, Argentina's wheat harvested area is projected to reach 5.8 million hectares, a 4 percent increase from the previous year. Similarly, Paraguay's wheat harvested area is estimated at 500,000 hectares, representing a 6 percent increase from the previous year.
Tractors Dominate the Machinery Market
- Tractors have significantly advanced agricultural mechanization in Brazil. Compact and utility tractors, characterized by their smaller size and lower horsepower, are widely used for various operations including landscaping, tilling, and mowing. The market for tractors with 80 HP or less is experiencing growth, driven by continuous product launches. In 2023, XCMG Brazil introduced the XT804-4D agricultural tractor at Agrishow 2023 in São Paulo. This 80 HP tractor was specifically designed to address the increasing demand in the national market and provide Brazilian farmers with enhanced power and comfort.
- The Brazilian government's Crop Plan for the 2022-2023 season has further stimulated the tractor market. This initiative enables small farmers to access credit for purchasing agricultural machinery, including tractors, at a 5% annual interest rate. The ongoing advancements in farm technology and the mechanization of production systems for major crops like soybeans are anticipated to contribute to market growth during the forecast period.
- Argentina's tractor market is also embracing new technologies. In 2022, John Deere expanded its Startup Collaborator program, aiming to strengthen relationships with innovative emerging companies. This initiative focuses on developing new technological solutions for Argentina's agricultural machinery, specifically in farm operations. These developments are anticipated to drive market growth in the coming years.
South America Agricultural Machinery Industry Overview
The market is consolidated by a few players holding the major share. The industry is dominated mainly by the local machinery manufacturing industries, and Brazil is the sixth-largest exporter of machinery units. Major key players in the market are Deere & Company, CLAAS KGaA mbH, Mahindra & Mahindra Ltd. CNH Industrial, and AGCO Corporation. In the regions, leading firms predominantly employ strategies like new product launches, partnerships, and acquisitions. These firms are forging strategic alliances with domestic companies to bolster their distribution networks and introduce innovative tractors tailored to local farmers' needs.
South America Agricultural Machinery Market Leaders
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Deere & Company
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Mahindra & Mahindra Ltd.
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CNH Industrial
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AGCO Corporation
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CLAAS KGaA mbH
*Disclaimer: Major Players sorted in no particular order
South America Agricultural Machinery Market News
- May 2024: CASE IH has launched the new Axial-Flow Series 160 Automation harvesters in Brazil. The company has invested BRL 100 million in its Sorocaba plant to become the global production hub for these harvesters. The new harvesters feature advanced automation technology and are designed for simplicity and productivity.
- August 2023: Mahindra and Mahindra Ltd introduced four new OJA tractor platforms in Brazil, aiming to improve agricultural practices. The OJA, Mahindra's lightweight tractor platform, was developed in partnership with Mitsubishi Mahindra Agriculture Machinery, Japan, with an investment of USD 145 million.
South America Agricultural Machinery Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions & Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Decling Agriculture Labor and Rising Labour Wages
4.2.2 Increase in Area Harvested in South America
4.2.3 Growing Government Support To Enhance Farm Mechanization
4.3 Market Restraints
4.3.1 Increasing Cost of Production is Limiting the Market
4.3.2 Limited Access to Credit
4.4 Porter's Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 By Product Type
5.1.1 Tractors
5.1.2 Plowing and Cultivating Machinery
5.1.3 Planting and Fertilizing Machinery
5.1.4 Harvesting Machinery
5.1.5 Haying and Forage Machinery
5.1.6 Irrigation Machineries
5.1.7 Parts and Attachments
5.1.8 Other Product Types
5.2 By Geography
5.2.1 Brazil
5.2.2 Argentina
5.2.3 Rest of South America
6. COMPETITIVE LANDSCAPE
6.1 Most Adopted Strategies
6.2 Market Share Analysis
6.3 Company Profiles
6.3.1 CLAAS KGaA mbH
6.3.2 Kubota Corporation
6.3.3 AGCO Corporation
6.3.4 Mahindra & Mahindra Ltd
6.3.5 Yanmar Holdings Co., Ltd.
6.3.6 Deere & Company
6.3.7 AGRALE S.A
6.3.8 CNH Industrial N.V
6.3.9 Bucher Industries AG
6.3.10 Lindsay Corporation
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
South America Agricultural Machinery Industry Segmentation
The South American agricultural machinery market analyzes the growth, trends, and types of agricultural machinery. The market is segmented by machinery type (tractors, plowing and cultivating machinery, planting and fertilizing machinery, harvesting machinery, haying and forage machinery, irrigation machinery, parts and attachments, and other equipment.) and geography, (Brazil, Argentina, and the Rest of South America.) The market sizing has been conducted in Value Terms (USD) for all the aforementioned segments.
| By Product Type | |
| Tractors | |
| Plowing and Cultivating Machinery | |
| Planting and Fertilizing Machinery | |
| Harvesting Machinery | |
| Haying and Forage Machinery | |
| Irrigation Machineries | |
| Parts and Attachments | |
| Other Product Types |
| By Geography | |
| Brazil | |
| Argentina | |
| Rest of South America |
South America Agricultural Machinery Market Research FAQs
How big is the South America Agricultural Machinery Market?
The South America Agricultural Machinery Market size is expected to reach USD 34.21 billion in 2024 and grow at a CAGR of 4.70% to reach USD 43.03 billion by 2029.
What is the current South America Agricultural Machinery Market size?
In 2024, the South America Agricultural Machinery Market size is expected to reach USD 34.21 billion.
Who are the key players in South America Agricultural Machinery Market?
Deere & Company, Mahindra & Mahindra Ltd., CNH Industrial, AGCO Corporation and CLAAS KGaA mbH are the major companies operating in the South America Agricultural Machinery Market.
What years does this South America Agricultural Machinery Market cover, and what was the market size in 2023?
In 2023, the South America Agricultural Machinery Market size was estimated at USD 32.60 billion. The report covers the South America Agricultural Machinery Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the South America Agricultural Machinery Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
South America Agricultural Machinery Parts Industry Report
Statistics for the 2024 South America Agricultural Machinery Parts market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. South America Agricultural Machinery Parts analysis includes a market forecast outlook 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
