Report Description

A tractor is a machine used for agricultural purposes and other tasks in fields. There are a variety of horsepower segments available for agricultural tractors, ranging from less than 50 HP to 50–100 HP, and more than 100 HP.

The North America tractor market had shown growth in the past years, and it is anticipated to increase at a high rate in the forecast year 2023-2028. Tractors are the most common type of agricultural equipment in the United States, used on nearly four million farms and ranching operations. With an average age of more than 25 years, some of the most popular models are older than any other type of tractor in the country. Older tractor models are not as safe as newer models, and many of these older models are driven by people who are more likely to be injured or killed while operating a tractor. Tractor overturns are one of the leading causes of death and injury related to agricultural machinery. One of the most important safety devices for tractors is a rollover protection system (ROPS). Unfortunately, most tractors made before 1985 do not have ROPS. There have been years of efforts to reduce the number of fatalities and injuries related to tractor overturns, but a large portion of the tractors used in U.S. agriculture are older models that do not include ROPS and do not have seatbelts. These efforts include worker education / training programs and activities as well as ROPS design / engineering applications, as well as research on how to encourage older tractor owners to install ROPS.

Market Overview

The demand for agricultural tractors is expected to grow in the United States of America during the forecast period due to the increase in manual labor prices and the lack of workers to perform regular agricultural tasks. In addition, the initiatives of the Ministry of Agriculture to promote the use of agricultural machinery on large-and medium-sized farms are expected to support the agricultural tractors market in the United States. The government of the USA has made efforts to incorporate modern agricultural technologies to improve the agricultural sector’s knowledge and increase land production. The high expenses and low returns of agricultural production are the major internal obstacles to the agriculture industry. It is also the main obstacle to farmers’ ability to increase their income, which is leading to a decrease in the number of people working in agriculture.

In 2022, North America accounted for the largest market share of agriculture farming tractors and is expected to maintain its position throughout the forecast period. This market growth is mainly attributed to the growing research and development activities and the widespread adoption of agricultural tractors. In addition, the average land size in North America is very large compared to other regions like Asia-Pacific and Europe. This means that farmers in the United States and Canada have huge incomes which they can invest in technology. In developing countries, however, due to the smaller farm sizes and the overpopulation, farmers in these countries generate fewer profit margins which are then transferred into the operations, which limits the possibilities of investment. Also, the ongoing trend for automation is expected to have a major impact on the market growth.

Market Drivers

The North American country's agricultural tractor market is heavily reliant on raw material suppliers, who are responsible for ensuring the timely availability and quality of raw materials to produce equipment. Vendors must maintain strong relationships with their suppliers to remain competitive in the market. Agricultural equipment is composed of a variety of materials and components incorporated into the system, and material and component suppliers are of paramount importance in the value chain, as the industry is subject to a high level of compliance. Raw materials used in the production of agricultural equipment include iron, steel, plastics, metals, and rubber. The components of agricultural equipment, such as tractors, include batteries, gearboxes, engines, and other components.

Market Trends

As agriculture has embraced digital technology, it has opened a range of possibilities for a more intelligent agricultural future. Manufacturers of agricultural equipment are constantly striving to innovate and provide product differentiation at competitive prices. There is a wide range of technology-based equipment available on the market, including GPS and remote sensing, which make farming more precise and productive. The governments of North American countries are striving to enhance the wellbeing of those involved in the agricultural production process and to ensure that all raw materials are sourced in a sustainable manner. They have also declared their intention to reduce their overall greenhouse gas emissions by 40 percent by 2030 and to reach zero emissions by the year 2040. Adoption of agricultural equipment that is energy efficient will facilitate the achievement of these objectives. 

Market Opportunities

Tractors and other agricultural machinery are a major source of greenhouse gases (GHG) in the agriculture sector. These emissions are mainly caused by the burning of fossil fuels, like diesel or gasoline, to power the engines of agricultural machinery. The main GHG emissions related to tractors are CO2, methane, and nitrous oxide. To meet the requirements of the reduction of carbon emissions, the use of advanced agricultural equipment is being encouraged worldwide. Therefore, electric farm tractors are expected to play a major role in the development of modern agricultural practices within the agricultural industry in North America’s countries. Conventional agriculture relies on ideal climatic conditions, fertile land, and sufficient water availability.

Market Challenges

The initial cost of an advanced agriculture electric tractor is typically higher than that of a traditional tractor. This is due to the use of advanced technology, including electric motors, large-capacity batteries, and advanced power electronics. The high initial cost can be attributed to a variety of factors, such as the cost of battery technology, the cost of power electronics, the limited production volume of the tractor, the cost of charging infrastructure, as well as the cost of research and development. Battery technology, for example, is still relatively costly, accounting for approximately 25-40%. Although battery costs have decreased over the past few years, they remain a significant component of the overall cost for electric tractors.

Recent Development

Tractors have completely changed the agriculture industry over the last decade. In the past, tractors were mainly used to pull armed equipment and help in agriculture. But now, tractors are not just powerful machines, they are self-driving, application controlled, fuel efficient, and easy to use. The tractor industry is very competitive, and companies are always looking for ways to differentiate their products from their competitors at affordable prices. Tractors are equipped with advanced technologies that collect data and use it for analytics and real-world applications. GPS, remote sensing, and other technologies make farming more precise and productive. A new frontier of innovation has emerged in North America, as agriculture meets digital technology, opening various ways to a smart agriculture future. Tractor manufacturers are constantly looking for ways to innovate and ensure product differentiation at affordable price. There are state of the art technology-based tractors on the market today.

Recent Development

Alternative tractor development is the process of developing tractors that run on other fuels than traditional gasoline or diesel. Several alternative fuels are being explored, such as electricity, hydrogen, biofuel, natural gas, or propane. The development of alternative tractor engines is driven by several factors, such as concerns about the environmental impact, energy security and the reduction of foreign oil dependency. Tractors with alternative engines are emerging as a potential market. For example, electric tractors have limited range compared to traditional gasoline powered tractors. Battery technology has advanced the range of electric tractors, but they still have limited range. Hydrogen fuel cell (HFC) tractors are electric tractors that use hydrogen to generate electricity. The basic principle behind hydrogen cell technology is that hydrogen gas is converted into water, which then generates electricity. This electricity is used to power the electric motor that powers the tractor.

Market Segmentation

The North America tractor market is segmented based on power output, drive type, application, country, and competitional landscape. Based on the power output, the market is further divided into under 40 HP, 40 HP - under 100 HP, and 100 HP & above. Based on drive type, the market is further bifurcated into two-wheel drive & four-wheel drive. Based on application, the market is divided into semi-metallic and ceramic. Based on country, the market is further divided into the United States of America, Mexico, and Canada.

Company Profiles

Deere and Company, Escorts Limited, Tractors and Farm Equipment Ltd, Same Deutz-Fahr Deutschland GmbH, Kubota Corporation, Mahindra Tractors, Kverneland Group, Claas KGaA mbH, CNH Industrial NV, and AGCO Corporation are among the major market players in the market that lead the market growth of the North America tractor market.