Market Trends of Brazil Agricultural Machinery Industry
Brazilian Farm Structure and Consolidation of Smaller Farms
- The availability of skilled labor in Brazil is reducing compared to the increasing area under agricultural activities. As farming is a heavy job for most farmers, they depend on technology to help increase farm productivity. The expanding availability of agricultural land represents the key factor driving the market. According to the Brazilian Institute of Geography and Statistics, in 2021, the planted area for agricultural production increased to 86.7 million hectares from 83.4 million hectares in 2020.
- More farms are being consolidated in Brazil to share the cost of heavy agricultural machinery. Due to rapid urbanization and reduced profits from farming, small farmers are forced to migrate to urban areas in search of work, leading to labor shortages and the need for mechanization of agricultural work. Therefore, the demand for agricultural machinery is rising to increase productivity and improve crop yields.
- Moreover, the Brazillian farms are dominated by the cultivation of sugarcane crops, which require massive machinery for mainly harvesting operations. Therefore, the larger area under the crop that utilizes the agricultural machinery is aiding the market's growth during the forecast period.
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81 to 130HP Tractors Hold Significant Market Share
- 81 to 130HP tractors currently hold a significant share of the market due to the expanding area of harvested agricultural land in the country. According to a survey by the Brazilian Institute of Geography and Statistics, in 2021, the harvested agricultural area in Brazil amounted to nearly 85.9 million hectares, a year-on-year increase of 3.3 percent and the highest figure of the decade. That same year, the planted agricultural land in the country reached around 86.7 million hectares. Moreover, tractors below 80 HP are suitable for small farming operations, while heavy tractors above 130 HP are expensive.
- Thus, there is a preference for medium HP tractors from 81 HP to 130 HP as they are versatile, robust, and valuable tools for improving efficiency and productivity in agriculture work. Besides this, companies are coming forward to establish their presence in Brazil, as it is one of the largest markets for agricultural tractors. For instance, in 2021, Mahindra, an Indian company, launched a Premium tractor with 86-110 HP in Brazil. The local dealerships already expected the range due to high demand.
