LONDON--(BUSINESS WIRE)--According to the latest market research report by Technavio, the haying and forage machinery market is expected to record a CAGR of over 5% until 2020.
In this report, Technavio covers the present scenario and growth prospects of the global haying and forage machinery market for 2016-2020. To calculate the market size, Technavio researchers have considered the unit shipments of haying and forage machinery in North America, APAC, Europe, and ROW.
“Mechanization of farming practices and farm consolidation in emerging economies are increasing the demand for high-capacity haying machinery. High-capacity machinery provides high-quality output with increasing ownership cost, and it has low maintenance,” said Mantri Charan Kumar, one of Technavio’s lead industry analysts for consumer goods and retail research.
Key leading countries for the haying and forage machinery market
- China
- US
- Canada
- Germany
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China
China is the largest producer and consumer of agricultural products. In 2015, China accounted for 21.06% of the global agricultural output. The country has about 200 million small farms, mainly used for the production of wheat and rice.
One of the main drivers of the agricultural machinery market such as haying and forage machinery in China is the government subsidies provided to farmers to promote mechanization. Mechanized wheat and rice harvesting increased to 90% and 60%, respectively in 2015.
The Chinese government initiated the subsidies for agricultural machinery in 2004 which is increased to USD 3.7 billion in 2016. These initiatives by the government have increased the affordability of the agricultural machinery for the farmers.
US
The agricultural machinery market in the US is reaching a stage of maturity. In the US, net income from farms is expected to reach USD 54.8 billion by the end of 2016, with a 3% drop from the previous year.
One of the key factors of an increase in the demand for haying and forage machinery in the US is the shortage of labor caused by increasing urbanization. However, the strengthening of the US dollar and global economic weakness have led to a decline in the prices of wheat and corn by 19% and 8% respectively in 2015. A decline in the commodity prices and fluctuation in the prices of the raw material used to manufacture machinery is affecting the overall market.
The trade-weighted US dollar index was at 87.5 on January 1, 2015, which increased to 95.3 on January 1, 2016. The fluctuation of exchange rates in the agricultural sector also impacts the commodity market. For example, the soybean exchange rate index increased by 6% in 2016. The exchange rate of corn and wheat is expected to increase by 3% and 2%, respectively, by the end of 2016.
Canada
The agricultural and food industry in Canada contributes to 7% of the country's GDP, with $50 billion in exports. The net farm income reached $15 billion in 2015. However, a decline of 9% of the net farm income is expected by the end of 2016, which is still 14% higher than the average during 2010-2014.
The major crops produced in Canada are wheat, canola, and corn. Canada has 32 million acres of land dedicated to growing forage crop, out of which 25,000 acres are used for growing alfalfa seeds. In 2015, the livestock market in Canada was valued at $50 billion, where a larger portion of the feed consists of the forage crop. The forage crop accounts for around 95%-99% of domestic consumption, which is used for livestock feed.
Germany
Germany is one of the largest manufacturers and exporters of agricultural machinery, with a production turnover that is expected to reach $8.2 billion by the end of 2016. Over 80% of Germany's land is used for agriculture and forestry. The major agricultural products in Germany include milk, pork, beef, poultry, wheat, and barley.
The level of mechanization in the agricultural sector in Germany is 94%. However, a slight decline in the demand for haying and forage machinery is expected by the end of 2016. A major reason for the decline in this sector is due to low commodity prices, which discourages many farmers from investing in purchasing the machinery. AGCO, Deere & Co., CLAAS, Krone Group, and Lely are the major vendors of haying and forage machinery in the country.
Browse related reports:
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- Haying Machinery Market In The US 2015-2019
- Agricultural Machinery Market In India 2015-2019
- Agricultural Machinery Market In The US 2016-2020
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