Agricultural Equipment in the U.S.

A Hot Tip about Agriculture and Animal Husbandry in the United States

Posted on: 8 Jan 2010

Industry Assessment

 

Background

Agricultural equipment consists of farm field and farmstead machinery used for the production of crops and agricultural livestock. Major product lines include wheel and track-laying agricultural tractors, planting and fertilizing machinery, tillage equipment, fertilizer and chemical application equipment, harvesting machinery, haying and mowing machinery, milking machines and other farm dairy equipment, poultry equipment, barnyard equipment, sprayers and irrigation equipment, grain dryers and blowers, commercial turf and grounds care equipment, and parts for farm machinery. Because of the rugged construction and long service life of many farm machines, replacement parts represent a significant industry segment. Tractor mowers and some irrigation equipment used as commercial turf and grounds care equipment are also included in this industry definition. The industry is classified as farm machinery under NAICS Code 333111.

 

Industry Overview and Global Competitiveness

Some 1,000 companies manufacture agricultural equipment in the United States, according to the U.S. Bureau of the Census, employing nearly 53,000 workers in 2006 (latest data available). U.S. manufacturers of agricultural equipment reported sales worth $19.8 billion in 2006, the last year for which complete data is available, according to the Census’ Annual Survey of Manufacturers.

 

Over the last 20 years, worldwide consolidation has concentrated manufacturing and sales of high-value added, self-propelled farm field equipment in three major U.S.-based firms and one smaller European competitor. These “full-line” manufacturers are Deere & Company, CNH Global, and AGCO. A German firm, Claas KG, is also major global manufacturer of farm field equipment, with strong positions in the U.S., European and other international markets. These firms lead the agricultural equipment industry around the world because of the high value and relatively long production runs of their premier product lines, as well as the extensive service that they provide to large-scale commercial farmers who buy this equipment. Other leading categories of agricultural equipment include irrigation technology, commercial mowers, and farm dairy equipment. John Deere and the Toro Company are leading U.S. manufacturers of commercial turf, grounds care, and irrigation equipment. Other leading U.S. irrigation equipment manufacturers include Valmont Industries, the Lindsay Corporation, and the Rain Bird Corporation. Bou-Matic and BECO Dairy Automation are the principal U.S. manufacturers of automated milking parlors and related systems and equipment.

 

Farm income is the leading influence on sales of agricultural equipment, domestically and around the world. The revenue that farmers receive from selling the commodity crops they grow (especially corn, wheat, soybeans, and cotton) is the principal component of farm income. Beginning in 2000, commodity prices rose steadily from low levels, topping out at historic highs in the spring and summer of 2008, before dropping significantly by the end of the year (January 30, 2009 release of “Agricultural Prices” by the U.S. Department of Agriculture).

 

Though still well above their 2000 levels, sharply lower commodity prices will definitely have negative consequences for U.S. manufacturers and exporters of agricultural equipment in 2009 and beyond. The blow may be softened to the extent that many farmers in the United States and other developed countries are likely to have cash on hand and relatively low debt, after eight years of strong income growth. Domestic and international sales will also be affected adversely to the extent that many manufacturers will find it increasingly difficult to obtain working capital or offer supplier credit to their dealers and customers.

 

Read the full report

More reports from U.S. Commercial Service


Posted: 08 January 2010

See more from Agriculture and Animal Husbandry in the United States

Expert Views    
Canada - U.S. Pesticide Regulation: An Economic Analysis   By Agriculture and Agri-Food Canada
Zepol 2009 Citrus Import/Export Report   By Zepol Corporation
Export opportunities for U.S. organics in the EU market   By Foreign Agricultural Service
North American Integration in Agri-Food   By Agriculture and Agri-Food Canada
Hot Tips    
Agricultural Equipment in the U.S.   By International Trade Administration