Technology driving agricultural equipment market

1 min read

A new study suggests that the global agricultural equipment market will be worth in excess of $62 billion in 2020.

The market research, compiled by Future Market Insights, suggest that despite the market stalling in 2020 as a result of the COVID-19 pandemic, the fundamentals driving the market – notably lesser arable land, holistic attention to high crop yield, and high dependability of agrarian societies – are likely to sustain market growth over the long run.

The study has revealed that electrification, automation, and AI are the big three manufacturing-side trends – traditional manufacturers will either acquire or partner with Silicon Valley AgTech start-ups to be on the right side of the digital farming ecosystem.

Key findings included:

  • Agricultural equipment suppliers are pairing with financial institutions to provide “rent to buy” options
  • Advanced agricultural practices such as precision farming for better yield per area will offer potential growth avenues to for manufacturers
  • Market players are leveraging digital and virtual platforms to promote their products to curb marketing expenses
  • Amidst the COVID-19 pandemic, businesses are shifting to localization of agricultural equipment to help local manufacturers survive
  • Europe remains the largest agricultural equipment market, attributable to strong foothold of manufacturers and booming agricultural industries in countries - Poland, and Germany.

The reports suggests that augmented reality (AR) will emerge as the game-changer in the agricultural equipment market, with social distancing becoming the new normal amid the COVID-19 crisis. Companies are looking to leverage AR technologies to address several issues in the 24*7 working agricultural sector.

Key manufacturers in the agricultural equipment market include AGCO Corp, Deere & Company, CLAAS KGaA mbH, EXEL Industries, Bucher Industries AG, CNH Industrial N.V., and Kubota Corporation.

The report found that farms are scaling up with increased dependency on efficient operations at reduced cost. The concept of corporate farm ownership is also likely to influence equipment purchasing decisions with more emphasis on the ‘bottom line’. This in turn will lead to better buying power and more leverage for the agricultural equipment manufacturer.

Bigger players in the agricultural equipment market space are resorting to automation of their equipment for higher profit pools. Kubota Corporation for instance has introduced unmanned agricultural machinery which can be deployed remotely by farmers. This helps farmers with minimal capital to get access to cutting-edge equipment at a lower cost.

Similarly, regions such as APAC are doing well in the agricultural equipment landscape with high penetration of global players. CNH industrial NV is tapping into countries such as China and India with unique sugar cane harvesters that align with weather and farming conditions in these regions.