North America Agricultural Tractor Machinery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

With changing industrial trends, leading to the development of more sophisticated agricultural machinery, farming methods have taken a giant leap forward. Increased farm consolidation, large production base, and greater governmental support through subsidies are driving the sales of agricultural tractor machinery.

In most of the markets in North America, farmers are increasingly adopting advanced technology, such as precision farming systems and GPS-controlled agricultural machinery. The North American market is driven by the sales of higher engine-power tractors, with tractors of power more than 40 HP contributing a major market share.

Farming has traditionally been a highly-labor intensive method in agriculture. However, the continually rising real wage of farm labor had a positive impact on the demand for tractors in the region, as farmers are increasingly adopting agricultural mechanization, including tractors, as a substitute for manual labor. According to the World Bank database, in 2018, in the United States, the agriculture sector accounted for 1.423% of the total employment rate, as compared to 1.447% in 2016. Moreover, the average hourly real wage for nonsupervisory hired farmworkers increased by 10.4%, from USD 12.00 to USD 13.25 during 2014-2018, which further instigated the demand for tractors in the country. According to the Conference Board of Canada, the country’s agriculture sector had a labor shortage of 16,500 workers in 2017, which was followed by an instant shoot up of the wage rate in the country. As such, the rapid shrinkage of farm labor has given a boost to the tractor market, and thus, driving the demand for tractors.