Agricultural Machinery Manufacturing

Agricultural Machinery Manufacturing

Brief Excerpt from Industry Overview Chapter:

Companies in this industry manufacture agricultural equipment and machinery, as well as commercial turf and lawn care equipment. Major companies include AGCO, John Deere, and Lindsay Corporation (all based in the US), along with CLAAS (Germany), CNH Industrial (UK), Kubota (Japan), Mahindra & Mahindra (India), and Shifeng Group and YTO Group (China).

COMPETITIVE LANDSCAPE

Demand for agricultural machinery is driven by farm income and crop production projections for the next season and can vary highly year to year. The profitability of individual companies depends on the volume of products sold, since many manufacturing costs are fixed. Big companies have large economies of scale, especially in manufacturing tractors and combines. Small companies can be successful by making specialized equipment, especially tractor attachments. The US industry is highly concentrated: the 50 largest companies generate about 80% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include machinery and equipment, which account for about 40% of the industry revenue. Farm-type, power take-off hp, and wheel tractors account for over 20%. Other products include harvesting machinery (over 10%); commercial turf and grounds care equipment (over 10%); planting, seeding, and fertilizing machinery (nearly 15%); and other parts for farm machinery (about 5%).