Market Trends of United States Agricultural Tractor Industry
Increasing Cost of Farm Labor Driving Demand for Tractors
In recent years, farmers, growers, and ranchers throughout the United States have expressed concerns about hiring an adequate number of qualified farmworkers at an economically viable wage. These challenges are particularly acute for labor-intensive sectors of United States agriculture. A prominent indicator of a tighter farm labor market in the United States is farmworkers' rising real (inflation-adjusted) wages. According to USDA, the daily wages of non-supervisory farm workers increased from USD 13.2 to USD 15.5 from 2019 to 2022. This increase in wages of farm workers is likely to lead to more demand for various farm technologies, such as agricultural tractors, in the country.
Farmers are increasingly adopting agricultural mechanization as a substitute for manual labor with a more cost-effective, easily available, and more efficient means of agricultural operation. Tractors, the primary power source for driving agricultural machinery, have, thus, seen a phenomenal rise in sales in these countries during the study period. For instance, according to the Association of Equipment Manufactures, sales of agriculture tractors in the United States were 244,637 units in 2019, which increased to 250,265 units in 2023. Hence, the demand for agricultural tractors in the country is anticipated to increase during the forecast period.
Row Crop Tractors Dominate the Market
Row-crop tractors are designed to cater to diverse agricultural tasks, including plowing, harrowing, and weed control. They can also operate seed drills, water pumps, and belt pulley threshers. With their high ground clearance, these tractors minimize crop damage. Given these advantages and the expanding acreage of crops nationwide, the market is poised for growth.
In addition to this, the usage of row-crop tractors is helping to increase crop production, thereby raising the farmer’s income and making the tasks quicker and easier along with reducing the need for the workforce. Along with this, they bring accurate and timely results with minimal or no errors and complete the tasks in lesser time intervals.
Further, with an increase in the average farm size of the country row crop tractors are being increasingly used by growers. For instance, as per the United States Department of Agriculture, the average farm size in the United States in 2022 was 463 hectares which increased and reached 464 hectares in 2023. This is anticipated to support the growth of the market over the forecast period.
Moreover, in response to surging demand, in August 2024, AGCO Corporation, headquartered in United States, unveiled its AE50 award-winning Fendt 600 Vario Series tractor in North America. This latest addition to the Fendt lineup is designed to provide farmers with a versatile, high-performance tractor, proficient in handling a wide range of farm tasks with efficiency.
