The Farm Equipment Market is evolving rapidly, driven by advancements in automation, precision farming, and electrification. With the growing demand for higher agricultural productivity and sustainability, modern farm machinery—ranging from tractors and harvesters to drones and autonomous equipment—is transforming farming operations worldwide. The integration of AI, IoT, and GPS technology is further enhancing efficiency, reducing labor dependency, and optimizing resource utilization. As governments push for mechanized and eco-friendly solutions, the market is set for significant growth, offering new opportunities for manufacturers and stakeholders in the agricultural ecosystem.
The farm equipment market is projected to grow from USD 39.95 billion in 2025 to USD 52.79 billion by 2032, registering a CAGR of 4.1%.
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According to the Association of Equipment Manufacturers (AEM) and the European Agricultural Machinery Industry Association (CEMA) the farm equipment market is expected to remain soft for the next 2–3 years due to a various factor such as low crop prices, high operating costs, tighter profit margins for farmers, and higher interest rates in the US with a stronger US dollar have impacted the farmers spending on farm equipment and their finance option for equipment purchases. In 2024, as the net farm income in the US is projected to fall by 25.5% Year-Over-Year to USD 116.1 billion, negatively impacting farmer’s purchasing power for new equipment.
“Cereal Combines segment holds the largest market during the forecast period.”
A cereal combiner, also known as a combine harvester, offers several advantages including: significantly increased harvesting efficiency, reduced labor requirements, simultaneous cutting, threshing, and grain separation, minimizing crop losses, time savings, and the ability to harvest large areas quickly. The North America is the largest exporter of cereal which is dominated by US with 13.9% of market share in export according to report OEA world.org published in 2023. Being the largest export for cereal, US also holds the largest market due to strong cultural of cereal breakfast. The major key players in US afor cereal combines are Deere & Company, CLAAS KGA, and Massey Ferguson. In US, Kellogg’s is the established player who has biggest market for ready-to-eat cereals. Considering the sale trend for cereal combines in North America, it experienced a drop in sales in past 2 year due to increase in interest rates. The federal funds raised by 1.5–1.75% in 2022, to which the interest rates climbed to 8.5%, which affected the purchasing power of farmers for tractors and cereal combines. This trend is continued in 2024 and is expected to remain till 2026 until the interest rate decreases after which the sales might increase steadily.
Followed by North America, Asia Oceania holds the largest market for cereal in the world. Where China produced ~652.29 million tons of cereals in 2024 and has the highest demand for cereal combines. According to OEC world, China exports cereal to major countries like South Korea, Vietnam, Cote d’Ivoire, Guinea, Guinea-Bissau. Key players like, Wuhan Wubota Machinery Co., Ltd., Shandong Jianghua Machinery Manufacturing Co., Ltd., and Jiangxi Yongji Agricultural Machinery Co., Ltd are the major manufacturer of cereal combines in China. These key players are providing advanced AI, sensors, and precision farming application in cereal combiners to increases their yield. This advancement will reduce the dependence on labor and will drive the market.
Opportunity: Increasing R&D and adoption of electric tractors
The increasing R&D activities and several companies’ launches of hybrid and electric tractors are expected to create growth opportunities for the agriculture sector. According to the China SCIO, the Chinese government has allocated significant funding to support R&D in agricultural machinery, including tractors. For example, an allocation of USD 3.5 billion (24.6 billion yuan) in 2024 is designated for subsidizing the purchase and application of agricultural machinery, including tractors. Also, the trend in R&D expenses for agricultural tractors in the US for 2024 reflects a strong commitment by leading manufacturers like Deere & Company, actively investing in technological advancements that cater to evolving agricultural needs.
Challenge: Rapidly changing emission norms and mandates
One of the key issues arising from changing emission norms is the need for farm equipment manufacturers to continually invest in R&D to develop and adapt engines and exhaust systems that comply with the latest standards. Meeting these evolving regulations can entail significant engineering, testing, and certification costs. From January 2023, the implementation of updated emission standards in India, designated as Bharat Stage TREM IV, was set to apply to tractors with a horsepower exceeding 50. This adjustment follows a series of postponements, initially scheduled for October 2020, responding to industry representations during the pandemic-induced disruptions.
“Asia Oceania is estimated to be the dominant regional market.”
Asia Oceania dominates farm equipment with a market share of >50% in 2025 even though the promising markets like China, India and Japan had noticed a deep in past 2 years. According to a report published by The International Monetary Fund in August 2024, the Asia Oceania market for farm equipment declined in 2023 – 2024 primarily due to various factors such as falling farm incomes globally, leading to reduced purchasing power for farmers, increased labor costs due to rural migration, high initial cost of modern machinery, and a trend towards delaying large equipment purchases due to economic uncertainty, causing farmers to prioritize maintaining existing equipment over buying new ones. The Indian market held more than 60% in 2024 within Asia Oceania region which was dominated by the major key players like Mahindra and Mahindra, Sonlaika, TAFE, and Escort Kubota Corporation. The Indian market has the market share more than 80% for 31-70 HP tractors due to small and medium farm field. The OEMs present in this country are actively investing in India for setting a new manufacturing plant for tractor and engines to lower the manufacturing cost. For instance, in January 2024, CNH Industrial started developing a new engine plant in Noida which will following Tier-IV and TREM-V regulations and in May 2024, Escorts Kubota invested USD 0.5 billion for developing new manufacturing facility in Uttar Pradesh etc.
The farm equipment market is dominated by established players such as Deere & Company (US), AGCO Corporation (US), CNH Industrial (Netherlands), Kubota Corporation (Japan), CLAAS KGAA (Germany), Mahindra & Mahindra (India), ISEKI & Co., Ltd. (Japan), Escorts Kubota Limited (Idia), SDF Group (Germany), and Yanmar Holdings Co., Ltd (Japan). These companies adopted strategies such as product developments, deals, and others to gain traction in the market.
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