U.S. Tractor Market - Industry Analysis & Forecast 2024-2029

INDUSTRY OUTLOOK

The U.S. tractor market witnessed shipments of 280,091 units in 2023 and is expected to reach 356,840 units by 2029, growing at a CAGR of 4.12% during the forecast period. The market is expected to grow robustly during the forecast period. The demand for 2-drive tractors is growing sharply in the U.S. market. Compact tractors are also gaining popularity due to the rise in their fuel-efficient & low-cost qualities. The growth of the U.S. tractor market is also driven by the increasing demand for food products and the expansion of agricultural land. Farmers are increasingly adopting mechanization to meet the growing food demand and improve profitability. The market is expected to witness considerable year-over-year (YoY) growth due to the following factors:

• Growing Farm Mechanization: The increasing penetration and adoption of farm mechanization practices throughout the U.S. have boosted the sale of new tractors. A favorable monsoon in 2023−2024, coupled with government support for increasing Agri-exports and farm mechanization, will drive the U.S. tractor market.
• High Demand for Efficient and Advanced Tractors: Farmers increasingly demand efficient and advanced tractors to help reduce operating costs and improve productivity. Tractors with advanced features like GPS guidance, telematics, and precision agriculture capabilities are in high demand.
• Launch of Several Schemes in the Agricultural Sector: Governments worldwide are launching various schemes to promote agricultural mechanization. These schemes typically provide subsidies or financial assistance to farmers to purchase agricultural machinery, including tractors.
• Growing Use of Electric-Powered Tractors: Electric-powered tractors are gaining popularity in the U.S. tractor industry due to their environmental benefits and lower operating costs. Electric tractors produce zero emissions, which helps to reduce greenhouse gas emissions and air pollution. They also have lower operating costs than diesel-powered tractors, as electricity is cheaper than diesel fuel.
• Surge in Use of Autonomous Tractors: Autonomous tractors are driverless and operate with minimum or without human intervention. The autonomous tractor technology is in its development stage and is expected to be an initiative to increase automation in agriculture and farming. These tractors can be used for planting crops, collecting real-time data, and taking pictures to monitor harvest, all through remote control.

SEGMENTATION INSIGHTS

INSIGHTS BY HORSEPOWER

The U.S. tractor market is categorized into the following segments based on the horsepower types: less than 46 HP, 46-100 HP, 101-250 HP, and above 250 HP. With less than 46, the HP segment has generated the highest sales in most regions. Tractors in this HP range can easily handle small and medium-sized fields and heavy-duty mowing tasks. Market trends driving less than 46 HP range tractor sales include:

• Crop Adaptability: These HP range of tractors are favored by farmers due to their versatility across various crops, accommodating the diverse agriculture seen worldwide.
• Sustainability Focus: Sustainable farming practices are a priority, and small & medium-sized tractors, with their efficient power-to-efficiency ratio, align well with eco-friendly approaches.
• Cost-Effective Solutions: In a globally competitive agricultural landscape, a small HP range of tractors offers cost-effective alternatives to larger models, attracting budget-conscious farmers while delivering substantial performance.

INSIGHTS BY DRIVE TYPE

The 2-wheel drive tractors have higher sales than the 4-drive tractors in the U.S. tractor market. Ease of driving and flexibility with light loads and in plain fields are significant factors that boost the demand for two-wheel-drive tractors. John Deere, New Holland, & Massey Ferguson hold the majority of the 2- 2-wheel drive tractors segment share in the U.S. tractor industry.

REGIONAL ANALYSIS

The Midwest region has the largest market share in the U.S. tractor market. The Midwest region represents one of the most intense areas of agricultural production in the world and constantly improves the global economy. The Midwest is the leading region with a high penetration of compact tractors. The hilly and plateau terrain of the area has driven the adoption of small HP tractors. Also, the region offers a variety of agricultural production beyond soybeans and corn.

Northeast's geography is dominated mainly by forest area, although it contains grasslands, coastal zones, beaches and dunes, wetlands, and abundant marine and freshwater fisheries. With respect to the farmland holding structure, small and medium farmers of the Northeast region have total land holdings of 18,820 hectares, due to which farmers in the region are investing in low HP (less than 46 HP) tractors. The U.S. tractor market is currently in the growth stage, and manufacturers are seeking capacity augmentation. The country's Northeast region still has negligible farm mechanization, and vendors can explore these regions with a portfolio of small tractors suitable for the region's rolling hills and low mountains.

The major crops of the South region are soybean and wheat. The region is growing due to fertile soil and a warm Mediterranean climate. The region's small and medium land holdings mostly use 46−100 HP tractors. Furthermore, a sub-tropical and humid climate characterizes the West region. The region experiences hot summers, heavy rainfall during monsoons, and moderate winters. The high prevalence of small and marginal farmers and the focus of both private and public bodies on improving agriculture aspects in the region are driving the potential for the sales of tractors in the below 46 HP and 46–100 HP segments.

COMPETITIVE ANALYSIS

The U.S. tractor market is highly concentrated, with the top players controlling most of the market. Domestic and global brands, on the other hand, are equally represented in the market. Global brands which are not previously present in the U.S. are planning to enter the market. For instance, VST Tillers Tractors Ltd, an India-based company, has announced that it will enter the U.S. market in the next two years. Further, the industry has established players in various segments. Vendors have improved their aftersales services, making customers loyal to the existing brands.

Established global players are moving toward increasing the introduction of technology in their offerings to attract more customers. For instance, CNH Industrial has introduced autonomous technology in agriculture tractors with Case IH, New Holland, and Steyr tractor brands. The company has already incorporated technology in its agriculture tractors, such as auto-steering and telematics. John Deere and AGCO worked to introduce the autonomous concept in their tractors. Furthermore, regarding advanced tractor technology, John Deere has equipped many models with GPS, location tracking, image sensors, and telematics to assist in field navigation. The company has also equipped its S700 model with features to autonomously adjust the harvesting equipment according to the state of crops. Vendors, such as ARGO and John Deere, provide direct financing to farmers to encourage them to buy tractors and other related agricultural machinery.

The slow-growing agricultural sector generally has a competitive environment, heavily influenced by prices due to supply-demand imbalance. Price competition for new tractor orders tends to be greater than after-sales services. With forecasts for 2029, prices for new tractor orders in the U.S. tractor industry are expected to be a particularly influential competitive factor. Competition in the secondary market occurs primarily between major domestic and global competitors and, in some markets, between regional and local companies.

Recent Developments by Top Brands in the U.S. Tractor Market

• In 2023, AGCO launched an electric tractor, Fendt 600 Vario, providing 150-200 Horsepower.
• In 2023, Kubota launched a fourth-generation M7 series of tractors.
• In 2023, Kubota introduced M5002 Narrow series tractors. The tractors are used in orchids and wine wards.
• In December 2022, CNH Industrial presented the prototype of the T7 Methane Power LNG & natural gas-powered N67 NG engine.
• In February 2022, Massey Ferguson launched the MF 6S series tractors. This machine provides up to 180 HP with advanced technology.
• In February 2022, AGCO and AgRevolution showcased new solutions from Fendt, Massey Ferguson, and Hesston Massey Ferguson at the National Farm Machinery Show in Louisville, Kentucky.

WHY SHOULD YOU BUY THIS REPORT?

This report is among the few in the market that offer outlook and opportunity analyses forecast in terms of:

• Market Size & Forecast Volume (units) 2020–2029
• Segmentation by Horsepower
• Segmentation by Drive Type
• Segmentation by Geography
• Production and trade values
• Major current and upcoming projects and investments
• Competitive intelligence about the economic scenario, advantages, industry dynamics, and market shares
• Innovative technologies
• Market share by each HP segment
• Market share by each country
• Company profiles of major and other prominent vendors
• Market shares of major vendors