Companies in this industry manufacture agricultural equipment and machinery, as well as commercial turf and lawn care equipment. Major companies include AGCO, Deere, Great Plains Manufacturing, and Lindsay Corporation (all based in the US), along with Claas KGaA (Germany), CNH Global (the Netherlands), Kubota (Japan), Mahindra & Mahindra (India), and Shifeng Group and YTO Group (China).
Worldwide, the agricultural machinery manufacturing industry is forecast to grow at an annual rate of 6.7 percent through 2016, to about $175 billion in revenue, according to Freedonia Group. Europe, the US, and China are the largest markets.
The US agricultural machinery manufacturing industry includes about 1,000 companies with combined annual revenue of about $39 billion.
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 more than 80 percent of revenue.
Imports of agricultural equipment, primarily from countries such as Germany, Canada, China, Mexico, and Japan, make up about 35 percent of the US market. Exports account for about 45 percent of US production. Major export markets include Canada, Mexico, and Australia....