The agricultural industry is one of the most crucial industries in the world. The industry requires ideal climatic conditions, land availability, and fertility, along with sufficient water availability. Apart from these factors, the availability of equipment for farm operations is another huge aspect of traditional agriculture. Some of the primary equipment used in the field include harvester, tiller, cultivators, seeder, and sprayer. Also, to power most of these equipment, a high horsepower tractor is also required in the field
Read Report Overview: Farm Equipment Rental Market
The global farm equipment rental market is expected to reach $46.28 billion by 2026, with a CAGR of 6.63% during the forecast period 2021-2026. The growth rate in the market is because of the increased government initiatives around the world for rental farm equipment, as this leads to an increase in agricultural production to cater to the growing global food demand. Also, inflation in farm equipment prices has made it difficult for small- and medium-scale farmers to afford the equipment. This has led to an increase in the growth of the global farm equipment rental market.
Thus, farm equipment demand by the farmers is dependent on their land availability and equipment affordability. The majority of the small- and medium-scale farmers struggle to afford equipment for their farm as their revenue generation from agriculture is low and less land leads to low production.
A major factor driving the farm equipment rental market is the high cost of farm equipment. Since 2005, due to increased emphasis on agricultural digitization, farm equipment has been updated with new technologies such as ISOBUS and sensors, which has created huge inflation in the prices of equipment. Thus, the increase in farm equipment cost has made it difficult for growers to afford the equipment. Thus, increased farm equipment cost is a huge driver for the farm equipment rental market.
One of the key challenges for the farm equipment rental market is low awareness about the availability of farm equipment on a rental basis. Since awareness of rental farm equipment is low, the adoption of these equipment is low, which leads to a hindrance in the growth of the farm equipment rental market.
The market holds a prominent share in various countries of North America, Europe, Asia-Pacific, China, the U.K., Middle- East and Africa, and South America.
Asia-Pacific is expected to dominate the global farm equipment rental market in the coming years. One of the primary reasons for high growth in the market is the benefits that rental equipment provides to the farmers. Farmers have the ability to pay for the equipment on an hourly, weekly, or monthly basis and can use the equipment to increase their agricultural production. The farm equipment rental market thus has a huge presence in the Asia-Pacific region.
Competitive Landscape of Global Farm Equipment Rental Market
Rental farm equipment providers have been actively working on growing the market by offering a wide range of farm equipment on a rental basis. Also, equipment providers offer the equipment on an hourly, weekly, or on a monthly basis to offer a better price to the farmers that would require the equipment for longer durations of time.
The market has seen major development by key players operating in the market, such as merger and acquisition, business expansion, partnership, collaboration, and joint venture. The preferred strategy for the companies has been mergers and acquisitions to strengthen their position in the global farm equipment rental market. For instance, in August 2021, Herc Holdings Inc., a leading North American equipment rental supplier operating as Herc Rentals Inc., announced that it had completed the acquisition of all the assets of Texas-based CBS Rentals. Also, in March 2021, Titan Machinery entered into a definitive purchase agreement to acquire HorizonWest Inc., which consisted of a three-store CaseIH agriculture dealership complex headquartered in the U.S.
Another strategy adopted by the players in the market is partnership, collaboration, and joint venture. The companies have put in considerable efforts to develop new strategies for increasing the availability of rental farm equipment, such as tractors, harvesters, balers, sprayers, and others. For instance, in February 2019, Tractor and Farm Equipment Limited launched JFarm Services, which aims at increasing easy access to farm mechanization solutions through the rental of tractors and modern agricultural equipment.
The global farm equipment rental market is poised to grow in the forecast period with increased developments by key players in the market. Also, farmers have started opting for rental farm equipment to enhance their agricultural productivity and efficiency, which results in an increased global agricultural production.
