Market Trends of United States Agricultural Tractor Industry
This section covers the major market trends shaping the US Agricultural Tractor Market according to our research experts:
Increasing Cost of Farm Labor Driving Mechanization
- In recent years, farmers, growers, and ranchers throughout the United States have expressed concerns about 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.
- A prominent indicator of a tighter farm labor market in the United States is farmworkers' rising real (inflation-adjusted) wages. According to data from the Fair Labor Standards, real (inflation-adjusted) wages for nonsupervisory crop and livestock workers (excluding contract labor) rose at an average annual rate of 1.1 percent per year between 1990 and 2020.
- In the past five years, however, real farm wages grew at 2.9 percent per year, consistent with growers' reports that workers were harder than usual to find in the country. This increase in the real wage for farm labor is the fastest experienced over four years 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, the primary power source for driving agricultural machinery, have, thus, seen a phenomenal rise in sales in these countries during the study period. Due to decreasing agricultural labor, the prices of farm labor are rising. Hence, the demand for agricultural tractors in the country is expected to increase during the forecast period.
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Row Crop Tractors Dominate the Market
- With the increasing unavailability of farm laborers and the growing mechanization of agriculture, the demand for row-crop tractors boosts the sales of the united states agricultural tractor machinery market. The increasing demand for power, precision, handling, and efficiency has shaped the development of the modern planter tractor, and it continues to drive the development of these tractors.
- The row-crop tractor is specifically tailored to grow crops that meet all agricultural demands, such as plowing, harrowing, leveling, pulling seed drills, weed control, and running various machines, like water pumps and belt pulley threshers. They have a high ground clearance to save crop damage. Hence, the market is anticipated to grow due to the above pros coupled with the increased acreage of crops in the country.
- Due to the continuous demand and rising sales growth, in 2020, Deere & Company launched a new 8 Family Tractor line-up that includes 8R wheel tractors, 8RT two-track tractors, and the industry's first fixed-frame four-track tractors. These new tractors come standard equipped with the latest precision agriculture technology and allow customers to choose the machine configuration, options, and horsepower to best fit their operation, particularly for the row crops like soybean, corn, wheat, millet, and many others.
