The agricultural haying and forage machinery market is projected to record a CAGR of 3.80% during the forecast period (2020-2025).The government support to farmers is one of the major factors which is driving the agricultural haying and forage machinery market. Increasing the cultivation of forage crops, especially in North America, acts as one of the major factors behind the growth of the market studied.
Key Market Trends
Government Support to Farmers is Driving the Market
The US government provides subsidies to the farmers in the form of direct payments, crop insurance, and loan for farm machinery. The above graph represents a negative correlation between farm subsidies and the total net farm income in the United States. This correlation further benefits the farmers to stabilize the investment on farm equipment including harvesters, whenever the net farm income falls. Moreover, over 95% of agricultural activities have been mechanized in Canada. Empirical observations suggest that Canadian farmers buy over USD 2 billion worth of machines and implements annually, including an average of 4,000 grain combine harvesters and balers, owing to the loans and credit facilities at a low-interest rate to purchase farm equipment in the country. As such, the government subsidies for farm mechanization has enhanced the usage of harvesters, thus, allowing the demand for tires to increase in recent years.
North America dominates the Market
The market demand in the North American region is led by the United States, the largest agricultural-based country in the region. The country’s highly evolved, commercial agriculture sector is responsible for around half of the demand. The increasing area under forage crops like alfalfa is the main factor which is driving the growth of the market in this region. Advancements in technology have led to the introduction of self-propelled balers, which are equipped with technology that offers unprecedented ride quality and maneuverability. Apart from balers, self-propelled forage harvester is dominating the market and is projected to register the same trend in the future.
The agricultural haying and forage machinery market is fairly consolidated, with a few companies holding the majority of the shares in the market. In the fast-growing agricultural haying and forage machinery market, companies are not only competing on the basis of product quality or product promotion but are also focused on making other strategic moves, to acquire greater market share and expand their acquired market size. Companies are investing heavily to develop new series, and are collaborating and acquiring other companies, which is expected to increase their market shares and strengthen the R&D activities. In October 2017, AGCO Corporation acquired a forage division of Lely Group, New Zealand, a leading manufacturer of equipment like round balers, rakes, loader wagons, tedders, mowers, and tillage products.
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