Market Trends of Mexico Agricultural Machinery Industry
Farm Labor Shortage And Decreasing Arable Land
According to the International Labor Organization, in Mexico, 6,752 thousand human resources engaged in agriculture were skilled in 2021. As technologically assisted agriculture needs skilled laborers that are in an acute shortage of availability, farmers are adopting technologies such as autonomous tractors that can be productive, considering the current challenge. This scenario is one of the major factors that drive the market forward.
Mexico has been witnessing an acute shortage of farm laborers. A survey by the Mexico Farm Bureau revealed that more than 40% of the farmers faced a consistent labor shortage in various farm operations in the state in the past five years. It led to an increased adoption rate of modern technologies such as autonomous tractors to ensure better management of farm resources.
According to the FAO, agricultural land accounted for 96,106 thousand hectares during the year 2019 which is lower than the previous year with 96,516 thousand hectares. As per a study conducted by the Economic Research Service (ERS), USDA in 2020, large farms are more likely to adopt autonomous tractors along with other agricultural technologies, with some of the highest adoption rates witnessed across farms of more than 3,800 acres. As a result, the shortage of farm labor, with the decreasing area of arable land, is anticipated to drive the rate of adoption of autonomous tractors among farmers, providing a boost to the overall market during the forecast period.
Tractors Dominates the Agricultural Machinery Market
In Mexico, there has been a trend in the launch of highly technological tractors over the past few years. For instance, in 2018, a group of investigators from the Chapingo Autonomous University designed a multipurpose robot tractor for the farming sector in the country. This is built to participate in the sowing of large grains, such as beans and corn, and is equipped with a tool for the detection and control of weeds. The special wheels of this tractor are capable of treading different terrains along with a rotary sensor which allows mapping the robot's location.
Increasing mechanization, growing government aid, and increasing export are likely to boost the sale of tractors in the country. In 2020, the Federal Government introduced agricultural programs to support the agriculture industry (previously known as PROCAMPO, now named PROAGRO) worth USD 53.74 million for seeds, fertilizers, equipment, and other agriculture products.
The recovery of the agricultural sector in the last two years in Mexico has been driven by the counter-cyclical nature of growth and recovery in the sector, along with the increase in exports of agricultural products to Central and South America. This is enabling farmers to make investments in automation, which is also supporting the growth of the market in Mexico.
