Agricultural Equipment Industry, 2007

U.S. Market Overview

As the world’s third-largest agricultural economy, producing a diverse array of crops under a wide range of conditions, the United States is the largest single country market for agricultural equipment – worth approximately $21 billion per year. U.S.-based manufacturers employ more than 50,000 people at more than 1,000 companies, from very small businesses manufacturing a few specialized products to some of the world’s largest multi-national corporations. The United States is also a net exporter of agricultural equipment: total U.S. exports of agricultural equipment were worth $6.8 billion in 2006, compared with imports of $5.7 billion. U.S. exports increased last year by 9.8 percent, while imports declined 5.7 percent.

Worldwide consolidation in the farm field segment of the agricultural equipment

industry – by far the largest segment of the industry by value – has concentrated manufacturing and sales of such equipment in three major U.S.-based firms and one smaller European competitor. These “full-line” manufacturers are Deere & Company (headquarters in Moline, Illinois; net sales in 2006: $19.9 billion), Case New Holland (Lake Forest, Illinois, but owned by Fiat of Italy; 2006 sales: $12.1 billion), and AGCO (Duluth, Georgia; 2006 sales: $5.4 billion). A German firm, Claas KG (2006 sales: $1.8 billion), is another major global manufacturer of farm field equipment.

Foreign competition is heavy and diverse. Competition in farm-field equipment is largely European and Asian. Japan’s Kubota and India’s Mahindra figure prominently in the lower-horse power tractor segment. Germany’s Claas, although much smaller than its U.S.-based rivals, is the principal foreign competitor in high-end self-propelled equipment, principally harvesters. Israeli and Indian companies are major competitors in irrigation equipment and are being joined by Italian, Spanish, and other European firms.