United States Agricultural Tractor Machinery Market - Growth, Trends & Forecast (2020 - 2025)

In recent years, farmers, growers, and ranchers throughout the United States have expressed concerns about the challenges of hiring an adequate number of qualified farmworkers at an economically viable wage. These challenges are particularly acute for labor-intensive sectors of U.S. agriculture. According to the 2018 Agricultural Census, contract and hired labor together accounted for 10 percent of U.S. agriculture’s total operating expenses. The cost of farm labor has a direct relationship with the percentage of the total population of a country employed in agriculture, considering simple demand-supply economics, thereby affecting the global agricultural tractors market. A prominent indicator of a tighter farm labor market in the United States is the rising real (inflation-adjusted) wage for farmworkers. Between 2014 and 2018, the average hourly real wage for nonsupervisory hired farmworkers (in 2018 dollars) rose from USD 12.00 to USD 13.25, an increase of 10.4 percent. This increase in the real wage for farm labor is the fastest experienced over a 4-year period during the past two decades. Farmers are increasingly adopting agricultural mechanization as a substitute for manual labor with a more cost-effective, easily available, and more efficient means of agricultural operation. Tractors being the primary source of power for driving agricultural machinery have, thus, seen a phenomenal rise in terms of sales in these countries during the study period. Due to decreasing agricultural labor, the prices of farm labor are rising. Hence, it is expected to increase the demand for agricultural tractors in the country during the forecast period.

In 2018, the market size for below 40 HP segments, dominated the United States market. These are being increasingly adopted by small-scale farmers as they are much smaller in size than the average agricultural tractors and are priced much lower. Despite the low-cost, compact tractors can help farmers perform many tasks with the help of farm equipment, such as backhoes and front-end loaders, and save labor wage expenses. Although a key reason for the increasing demand for larger tractors is the hard soil condition, increased use in non-agri segments, such as infrastructure and construction fields, has also contributed to the increase in demand in this category. Utility tractors are more than capable of working with significant front or rear attachments, like front-end loaders and backhoes, for loading and digging, but can also be used for landscaping, seeding, hay cultivation, and snow removal that drives the market for this segment, in the country.