Global Farm Equipment Rental Market - 2023-2030

Global Farm Equipment Rental Market - 2023-2030

Market Overview

""Farm equipment"" refers to machinery used in farming or agriculture. Tractors, harvesting equipment, mower conditioners, tillage equipment, and other agricultural implements are examples of farm equipment. The high cost of purchasing new farm equipment and the associated maintenance services increases the need for farm equipment leasing services. Farmers are using leasing services to make a profit by removing the expenditures of farm equipment upkeep. Renting agricultural equipment allows farmers to harvest crops on schedule while avoiding enormous sums of money as a down payment on heavy farm equipment. Furthermore, if the agricultural operation is not profitable, purchasing heavy farm equipment is a financial strain for farmers.

The increasing demand for staple crops due to food scarcity has prompted governments to provide subsidiaries and advanced farming equipment at low prices, propelling the market growth. Additionally, the advent of high-horsepower (HP) tractors for farming in dry soil conditions and the availability of harvesting, pest control, planting, and spraying fertilizers and insecticides propel market growth. Apart from this, significant enhancements in the agricultural sector, the large-scale uptake of rental equipment in crop cleaning and threshing activities, and the shortage of skilled labor are positively stimulating market growth.

The global farm equipment rental market was valued at USD YY million in 2022. It is forecasted to reach USD YY million by 2030, growing at a CAGR of 7.13% during the forecast period (2023-2030).

Market DynamicsThe growing need to meet the rising demand for food products is driving the market

One of the important farm equipment rental market trends predicted to favor the industry during the forecast period is the growing need to fulfill the rising demand for food goods. In recent years, the global consumption of fruits and vegetables has soared. It is due to the growing vegetarian and vegan population. In nations such as India, where most of the population is vegetarian, there is a significant demand for fruits and vegetables. Due to ethical concerns over animal cruelty, the millennial generation in these countries prefers a vegetarian or vegan diet. As a result of the large-scale global need for fruits and vegetables, the demand for agricultural rental equipment will rise. Furthermore, due to considerations including increasing consumption rates, the need for more food production increased power needs on farms, and the size of agricultural holdings, there is a growing demand for these farm equipment rentals from developed countries.

The key manufacturers are also launching new products, which is expected to drive the global farm equipment rental market. For instance, on September 6, 2022, Kubota Corporation announced that Kubota would be the first Japanese manufacturer to release electric tractors. Kubota offers a limited number of compact electric tractors, the LXe-261, in Europe, actively striving toward carbon neutrality. The LXe-261 would be made available for a long-term rental service for European municipalities.

However, the fluctuating fuel prices and shortage of workers in rental companies like drivers can hamper the growth of farm equipment rental services. Furthermore, increased government support for acquiring new farm equipment is one of the primary hindrances to expanding the worldwide farm equipment rental industry.

Market Segmentation: The tractors segment accounted for the highest global farm equipment rental market share

Tractors are expected to occupy most of the market share during the forecast period. The rising demand for high horsepower tractors, especially those above 40 horsepower (HP), i.e., utility tractors and row crop tractors, from mature markets, like Europe and North America, tends to offer new opportunities for players operating in the market. In addition to these developments, key players offering tractor rental services are expected to augment developments in the market further. For instance, in December 2021, Mahindra and Mahindra announced the expansion of Krish-e, which is farming as a service offering across 1600 dealerships in India. Moreover, growing awareness of the benefits of farm mechanization and the low maintenance cost of the rental fleet is expected to attract several small and medium-scale farmers. So, these are some of the primary factors likely to create demand for tractor hiring in developing countries, mostly in Asia-Pacific and Africa. It allows tractor owners to fully utilize their machines while providing services to farmers who cannot afford their tractors. On September 1, 2022, New Holland Agriculture, a brand of CNH Industrial, launched the Blue Series SIMBA and its entry in the sub-30 HP compact tractor segment in India at the 7th EIMA Agrimach Expo 2022 in Bangalore. Introduced as a part of the brand’s Blue Series range, the tractor is designed for specialty applications such as spraying, rotavation, and inter-row cultivation in vineyards, orchards, sugarcane fields, and cotton fields. The first lots of 21 tractors were handed over to customers at the launch of rental services.

Geographical Penetration: Asia Pacific is the dominant region during the forecast period

Asia Pacific was the dominant region for the global farm equipment rental market in 2022. Growing awareness among the mid- and low-income farmers of the Asia-Pacific region about the benefits of farm mechanization is encouraging them to shift from labor-intensive farming techniques to advanced technological equipment in the agricultural sector. It is anticipated to increase demand for tractors and farming equipment such as harvesting, spraying, and threshing equipment for renting purposes in the region. Government initiatives and active key player engagement in the market aimed at reducing farmers' financial burdens in Asia-Pacific region countries such as India and China serve as significant growth drivers for the farm equipment rental market. The leading players in these markets are also engaging in mergers and acquisitions to bolster their market presence further. For instance, Mahindra and Mahindra acquired a 69% stake in Carnot Technologies, the developer of the Krish e centers, in March 2022. Carnot Technologies includes over 25,000 tractors, harvesters, and sprayers working on over 3 million acres of land each season. In May 2021, Tractors and Farm Equipment (TAFE), a significant tractor manufacturer in India, offered 16,500 tractors and 26,800 implements on a ""free-of-cost"" rental basis to small farmers in Tamil Nadu. In addition, increasing demand for farm implements due to the labor shortage in agriculture is expected to support the market's growth during the forecast period. Based on the abovementioned factors, the Asia-Pacific region is expected to hold a dominant market share over the forecast period.

Competitive Landscape

Some of the major players in the market are AGCO Corporation, Deere & Company, Escorts Limited, Flaman Group of Companies, Friesen Sales & Rentals, Messick Farm Equipment Inc., Pacific Ag Rentals, Pacific Tractor & Implement, Premier Equipment Ltd., The Papé Group Inc., Titan Machinery Inc., and Tractors and Farm Equipment Limited. Several players are focusing on strategies, such as mergers, acquisitions, partnerships, etc., to cement their market positions. For instance, in January 2022, Messick's opened its new 2230,000 sq ft headquarters in Pennsylvania, US. In December 2021, Papé Machinery Agriculture & Turf completed the asset purchase of Valley Truck & Tractor, a nine-store John Deere dealership in Northern California's Sacramento Valley. In August 2022, Deere & Co. invested in Hello Tractor, a Nigerian startup that offers marketplace and fleet management technology for African farmers to rent tractors. In July 2022, the state government of Bihar in India announced the launch of mobile app-based farm equipment rental services for small farmers who cannot afford to buy their farm equipment.

COVID-19 Impact: Negative impact on the global farm equipment rental market

The COVID-19 pandemic had a very negative impact on the farm equipment rental market worldwide. Equipment rental stores were closed due to lockdowns. Farmers also could not travel to rental stores due to the strict imposition of travel restrictions and social distancing norms. However, in late 2020 and early 2021, as the COVID-19 pandemic receded and the COVID-19 criteria returned, growth returned to the global farm equipment rental market. Many new players also entered the market to tap into this post-COVID-19 growth in farm equipment rentals in markets like India. For instance, in August 2021, Indian agritech startup FarmKart launched its tech-enabled platform rent4farm to offer farm equipment and tractor rental services in India.

The global farm equipment rental market report would provide an access to approximately 53 market data tables, 50 figures and 200 pages