U.S. Tractor Market is Expected to Reach $25 Billion in 2022

Every day, the world’s industries create and innovates methods to make things easier and more efficient. One such example is present in farms and land building, some of the most traditional and long-standing works from the beginning of civilization. As industries like agriculture and construction show a significant rise in mechanizing work, vehicles and equipment become vital. One of the primary things that businesses invest in is tractors.

Fast forward the times to current conditions where a global pandemic is slowing things worldwide. The present conditions of the global tractor market are on a slowdown as we all focus on battling the Coronavirus and keeping trades afloat. However, until recently, in 2021, the numbers for tractor demand are rising again. There's more need for heavy-duty tractors to help keep productive businesses and result in simpler work for people.

Among the connected product offerings of various tractors in the market, tractor insurance is one of the non-negotiable things to invest in. For example, you are into the farming business; it's no joke to purchase and sign up on plans to acquire high-performance tractors. You'll need some protection to cover expensive tractors. As a result, U.S. tractor markets rise from activities in tractor retail, tractor insurance, accessories, and other items related to the vehicle.

As the world continues to grow businesses and sectors that need various tractors, there will never be an absence of the demand for these vehicles. Tractor innovations and tractor producers will continue to supply the global demand for tractors. It doesn't matter which industry and market segment these tractors are for; the rising numbers provide endless opportunities for businesses that supply slowed vehicles like tractors.

Global tractor market

The global tractor market is one of the most important businesses in various industries that use high-power vehicles and equipment. As tractor vehicles and equipment become more necessary and accessible to businesses, the rise in the demand for these large vehicles is evident to speed up business operations and produce more products to the market.

In 2019, a total sales volume for tractors resulted in about 67B USD. The numbers are slowly rising worldwide, with the largest market shares coming from the Asia-Pacific region, resulting in about 60% of the global tractor shares worldwide. However, despite the dominance of the Asia-Pacific market in sales, the biggest exporters of tractors come from Europe. Europe dominates exports with about 57% market share in sending out millions of tractor units worldwide.

Global tractor industry growth rate

Let's focus on the future projections in the global tractor market. The tractor market's CAGR or Compound Annual Growth Rate is about 5.8%. The 5.8% rate projects about 94B USD in 2026. Currently, the expected end number for the global tractor market in 2021 is around 74B USD, with millions in unit sales.

The most common scenario you may think of for tractors is in farming, where farmers or farm owners ride big farm tractors in the field to harvest. Some of the other businesses that use tractors are construction businesses that deal with large volumes of material hauled by earthmoving tractors. Another example of tractor application is in commercial space to transport things around large commercial areas at slow speeds. Tractors have various applications not limited to agriculture.

The positive growth rate and projections for tractors indicate that even with the persistence of various technologies, tractors are some of the most bedrock items for multiple businesses. Many industries depend on tractors for production, manufacturing, and overall activity. All these businesses, trades, and industries contribute to the growing number of tractors worldwide.

Forecasts and trends in the U.S. market

Now that the global tractor market is on a steady rise of 5.8% annually, how does this affect the U.S. tractor market? It simply means that the forecast of the U.S. tractor market results in around 25B in 2022, a significant portion of the global market share for tractors.

Many factors contribute to the growing forecast of tractor volumes. As most of the tractor volumes are focused on agriculture and construction, these are the more dominant demand drivers of the tractor market in the U.S. Here are some of the reasons why the U.S. needs tractors daily.

Mechanization shift

More farmlands equate to more work. Thus, you have more farm businesses moving around to scout for the best tractor deals in town. Not only that, but these people also look for complementary products and equipment for the tractor. You will typically find tractors in the same scene as loaders, rotary tillers, plow attachments. Moreover, you will commonly find tractors with intangible products such as warranties and insurances for tractor protection.

Higher labor costs

The higher demand for work means that labor costs are rising. Unfortunately, many people switch to tractors in favor of long-lasting and continuous work at lower long-run costs. Farming and construction are some of the most labor-intensive jobs around. The introduction of large equipment makes things easier and faster, requiring fewer people for work.

Increasing global population

By 2050, the global population will reach around 10 billion people. The U.S. has projections that result in almost double the current population by 2050. A higher number of people means more volume of needs. Industries and businesses that focus on basic needs such as food and housing will be in an all-time demand. To keep up with the work, technological innovations and high-end equipment are necessary to speed up work in providing these needs.

Personal implications on tractor demand growth

While the U.S. market tractor size increases in 2022 by 25B USD, what does this mean for personal consumers that have nothing to do with farming businesses, construction trades, and commercial settings?

Tractors are at an all-time rise because more people are buying tractors. People who are into gardening also benefit from owning a personal mini-size tractor. Moreover, if you want to own a controlled vehicle to roam around your property or drive around your premises, tractors make a great addition. Consider it your mini car unit without the hassle of large-size rides. Little things like these all add up to make up for the demand for different tractor sizes and power.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes