Agricultural Tractor Market - Industry Analysis, Market - Forecast(2024 - 2030)

Agricultural Tractor Machinery Market Overview

Agricultural Tractor Machinery market size is forecast to reach US$125 billion by 2030, after growing at a CAGR of 6.1% during 2024-2030. Tractors are essential in enhancing agricultural efficiency. The agricultural tractor market is driven by the increasing demand for agricultural production, shortage of agricultural labor, government initiatives to support mechanized agriculture, growing need for farm mechanization and demand for advanced tractors. A major trend in the market is the growing demand for electric tractors. As the price of fuel remains volatile affected by geopolitical situations, the industry is moving toward adoption of electric tractors. As a result, several farm equipment manufacturers are launching electric models. For instance, in August 2024, AutoNxt Automation, a Mumbai-based startup, unveiled its innovative Electric Tractor. In certain regions, there is also a growing interest in sustainable agriculture. Use of electric tractors helps farmers lower their carbon footprint.  Another trend is smart tractors that use GPS-guided navigation systems, Internet of Things (IoT), cloud-based digital services and more to optimize crop yields, improve precision and reduce carbon footprints. This represents the Agricultural Tractor Machinery Market Outlook.

Market Snapshot:

Agricultural Tractor Machinery Market - Report Coverage:

The “Agricultural Tractor Machinery Market Report - Forecast (2024-2030)” by IndustryARC, covers an in-depth analysis of the following segments in the Agricultural Tractor Machinery Market.

COVID-19 / Ukraine Crisis - Impact Analysis:  

• Due to COVID the agricultural sector was heavily impacted. On account of the closing of restaurants and schools and COVID-19 outbreaks at processing facilities, the agricultural supply chain faced major challenges. This also impacted the market for agricultural tractors.
• The Russia-Ukraine conflict impacted the Agricultural Tractor Machinery market. The conflict disrupted supply chains and led to increased energy prices. Additionally, the war has also led to inflation, further straining the market for tractors. 

Key Takeaways

Row Crop Tractors the Largest Segment

Row Crop Tractors are largest segment in the Agricultural Tractor Machinery, in terms of type due to its usage in large farms. It can perform different farming operations like weed control, ploughing, levelling harrowing, etc. These tractors are specifically used for growing row crops such as sunflower, potato, canola, dry bean, field pea, flax, safflower and more. Within the roots and tubers family, potato dominates in worldwide production. With respect to global dietary importance, potato ranks fourth after maize, wheat and rice. World production and utilization of roots and tubers is projected to increase by about 22% by 2033, according the FAO OECD Agricultural outlook 2024-2033. As the demand for these crops rise, so does the demand for row crop tractors. Heavy duty row crop tractor unit sales continued to increase in the U.S. in August 2023, according to data from the Association of Equipment Manufacturers (AEM).

Electric is the Fastest Growing Segment

Electric tractors are the fastest growing segment in the Agricultural Tractor Machinery market, in terms of Engine Type. According to CUTS Centre for Competition, Investment & Economic Regulation, tractors occupy a share of 7.4% in the total diesel consumption of India. This makes tractors the biggest GHG emitter within the agriculture sector, which accounts for 14% of India’s total GHG emissions. Electric tractors offer a sustainable solution to the environmental impact of agriculture. They produce zero emissions, reducing air pollution and combating climate change. These tractors are also more efficient, with instant torque and quieter operation. Owing to these benefits, there are several developments in the market. For instance, in July 2024, Monarch Tractor secured $133 million in funding for expansion with a particular focus on Europe Electric tractors are versatile and suitable for various agricultural applications making them a promising option for farmers seeking to reduce their carbon footprint and improve efficiency.

APAC Dominates the Market

The Asia Pacific region dominates the Agricultural Tractor Machinery market with a share of 38% in 2023 owing to its large agricultural sector and the significant volume of food production and need for farm equipment. Asian countries such as China, Indonesia, Thailand, Vietnam and India have substantial demand for Tractor Machinery to maximize productivity to ensure food security. China's grain output reached a record high of 695.4 million tons in 2023, an increase of 8.8 million tonnes compared to 2022, as per data from the Ministry of Agriculture and Rural Affairs. Additionally, the Asian region also exports a lot of its agricultural commodities which drives the need for higher agricultural productivity, further boosting the demand for Tractor Machinery. Additionally, governments also promote the usage of farm equipment such as tractors through incentives, schemes and subsidies. For instance, in March 2024, the Agri-Machinery Assembly Center, with an investment of $30 million, was established in the Philippines, in collaboration with the Korea Agricultural Machinery Industry Cooperative (KAMICO). Such initiatives drive the growth of agricultural mechanization in the region improving efficiency and yields.

Increasing Need for Agricultural Productivity to Drive the Market

The world population reached 8 billion people on 15 November, 2022, as per data from the United Nations (UN). According to the UN, by 2050, the world must feed 9 billion people. The demand for food will be 60% greater than it is today. The growing global population is intensifying the demand for food driving the need for higher agricultural productivity. Farmers are increasingly adopting advanced agricultural tractors to improve efficiency and output on their farms. These machines reduce manual labor, accelerate farming processes and increase yields. Moreover, the focus on precision farming and smart technology integration in tractors enables better management of resources, such as water and fertilizers, further boosting productivity. As a result, the agricultural tractor machinery market is witnessing significant growth, with farmers investing in modern equipment to meet rising food production demands.

High Initial Costs to Hamper Growth

One of the key challenges in the agricultural tractor machinery market is the high initial cost of purchasing tractors and other advanced farming equipment. Small and medium-scale farmers, especially in developing regions often struggle to afford these machines due to limited access to financing and capital. This financial barrier hinders widespread adoption, especially in economies where farming practices are still manual. According to a study conducted in 2022, the overall level of agricultural mechanization in Ghana was found to be very low, on an average more than 77% of the farm operations were done manually. Additionally, the cost of maintenance and repairs adds to the financial burden, discouraging farmers from investing in modern machinery, despite the potential long-term benefits in productivity.

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Key Market Players

Global Agricultural Tractor Machinery top 10 companies include:

1. Deere & Company
2. TAFE Ltd.
3. Mahindra & Mahindra
4. CNH Industrial
5. Sonalika International 
6. CLAAS
7. Kubota Corporation
8. AGCO Corporation
9. Deutz Fahr
10. Daedong Corporation

Scope of the Report: 

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