WILMINGTON, DEL. — The global agricultural tractor market is expected to reach $97.8 billion in value by 2031. The market garnered a revenue of $59.1 billion in 2021 and is projected to grow at a compounded annual growth rate (CAGR) of 5.6 percent during the 2022-2031 period.

“The growth of the global agricultural tractors market can be attributed to the rise in adoption of precision farming due to increasing governmental support for the agriculture sector,” according to Allied Market Research, which issued its sales forecast on Nov. 15. “Moreover, the extensive demand for fuel-efficient tractors is projected to push the market ahead. Additionally, technological innovations in tractor technology are expected to open up new avenues in the market.”

Other analysts agree that the global agricultural tractors market is in line for huge growth primarily due to rising adoption of precision farming and increasing introduction of mechanization in agriculture activities, as Allied’s study concluded. According to Mordor Intelligence, the increasing cost — and scarcity — of farm labor is pushing the agricultural tractor market forward. 

“In recent years, farmers, growers and ranchers throughout the United States have expressed concerns about hiring an adequate number of qualified farmworkers at an economically viable wage. These challenges are particularly acute for labor-intensive sectors of U.S. agriculture,” Mordor’s study found, in part. “Farmers are increasingly adopting agricultural mechanization as a substitute for manual labor. Hence, the demand for agricultural tractors in the country is expected to increase.”

Tractors of more than 100 horsepower (HP) are expected to see the greatest growth rate through 2031, Allied’s research revealed, with a CAGR of 6.6 percent. The 30 to 50 HP segment, which accounted for the largest market share in 2021 with around one-third of the total share, is also expected to grow. 

According to Farm Equipment Manufacturer’s Association chairman emeritus Charlie Glass, the 40 HP and under market was expected to eclipse sales of all other tractors in the U.S during 2023, accounting for 63 percent of all sales. “The principal purchasers of these units are lifestyle farmers, who are actually not farmers but derive the majority, if not all, of their income from sources other than farm income,” Glass noted in his 2023 Annual Tractor and Combine Retail Sales Forecast. 

Sales of all agricultural tractors are projected to rise substantially in the U.S., which accounts for almost 11 percent of the global agricultural tractor market in terms of volume, in the coming years. This will occur primarily due to the massive increase in farm mechanization, according to ResearchandMarkets.com’s “U.S. Tractors Market -- Industry Analysis and Forecast” for 2022-2028.

“The government is also creating strategies to enhance the welfare of farmers by converting agriculture into a viable activity by paving the way for new machinery purchases. The awareness about advanced agriculture equipment to improve per hectare yield, reduce the overall cost of crop production, and increase the income-centric inclination of farmers is boosting the sale of new machinery in the country,” the ResearchandMarkets.com report stated, in part.

Sales of both 2-wheel and 4-wheel drive tractors are expected to climb in the coming years, though the 4-wheel segment is expected to return the greatest CAGR of 7.4 percent during the timeframe, according to Allied Market Research. “The advantages of 4-wheel drive such as versatility and high productivity might help widen the scope of the segment,” their study found. 

In addition, sales of electric agricultural tractors are expected to make an impression on the marketplace. In 2021, U.S.-based Soletec introduced its new 70 HP, 60 kWh electric tractor specifically designed for heavy-duty farm and vineyard operations. As battery storage capacity technology increases, sales of electric tractors by Soletec and other manufacturers are expected to increase. 

“Electric tractors are widely used in the industry for various indoor and outdoor applications. The rising trend of automation and increasing environmental concerns will accelerate growth. Farmers in developed countries are looking for these machines to reduce the cost of fuel and replace them with their standard machines,” reported ResearchandMarkets.com.

The rosy forecast for the international agricultural tractor market was not enough, however, to stop CNH Industrial from implementing job cuts in November after a “disappointing quarter” for tractor sales, according to its CEO. In South America, tractor sales have declined as farmers slow investments due to lower commodity prices. This resulted in the U.K.-based company’s announcement of an immediate restructuring that will cut 5 percent of its salaried workforce costs and eventually reduce total labor and overhead expenses by as much as 15 percent. 

As a result of the unexpectedly weak South American tractor market in 2023, CNH lowered its outlook for the year to between 3 percent and 6 percent net sales growth. Original CNH projections called for as much as 11 percent net sales growth over 2022.