Global demand for agricultural equipment to reach $208 billion
Cleveland, OH - Global demand for agricultural equipment is forecast to expand 6.9% annually through 2018 to US$208 billion. Advances will be driven by the increasing mechanization of farming operations in developing countries, with...
Cleveland, OH – Global demand for agricultural equipment is forecast to expand 6.9% annually through 2018 to US$208 billion. Advances will be driven by the increasing mechanization of farming operations in developing countries, with particularly sizable gains anticipated in China, India and Brazil.
Ongoing economic expansion, population growth, and rising per capita calorie intake will boost food consumption. “These trends will not only place greater pressure on farm operators to become more efficient and productive, but will also increase farm incomes, creating additional opportunities for machinery sales,” notes analyst Bridget McMurtrie.
Tractors, which are typically the first machines purchased when an agricultural sector mechanizes, account for the largest single share of world farm equipment sales. Demand for harvesting machinery, accounting for the next largest share of global sales in value terms, will climb at a faster pace because of the efficiency gains they can provide.
The Asia/Pacific region, which accounted for 43% of world agricultural machinery demand in 2013, is the largest and fastest growing regional market. China alone will account for 29% of global value gains between 2013 and 2018. India, the third largest national farm equipment market behind China and the United States, will also record large increases, as will Brazil.
Product sales are expected to climb at robust rates as well in a number of smaller markets in the developing world, including Turkey, Ukraine, Thailand and South Africa. Nevertheless, used machinery will continue to constrain demand for new farm equipment in developing nations.
Product sales in developed countries that are already highly intensive users of agricultural machinery will be largely fuelled by replacement requirements. Replacement schedules are influenced by a range of factors, including overall economic conditions and the ongoing development of increasingly sophisticated technologies capable of substantially reducing costs and improving yields, making it economically feasible for farmers to replace farm equipment more frequently.
The United States is by far the largest developed world market, accounting for 16% of global product demand in 2013. Agricultural equipment sales in most developed countries will expand at healthy rates but will remain below the global average growth.
These and other trends are presented in World Agricultural Equipment, a new study from The Freedonia Group Inc., a Cleveland-based market research firm. Published in July 2014, the 459-page report is available for US$6,300. Visit http://www.freedoniagroup.com for details.