Whenever you drive past a farm or field that has some work happening on it, it’s most likely that the machines being used are made by one of the top 10 largest agricultural equipment companies in the world. With the negative trends that are present in the global agricultural sector, and high barriers to entry, these ten companies are set to dominate the market for years to come.
The global agriculture sector is facing a number of major challenges, including a potential increase in demand that stems from the growing world population and diminishing work force availability due to the migration of more people to cities, which leads to a lack of qualified and even unqualified people to work at farms. The largest agricultural equipment companies, alongside the 11 biggest agricultural companies in the world, are positioned the best to help deal with these issues, since equipment plays a major role in all stages of farming.
Even though agricultural equipment companies are facing lower sales, which are affected by low crop prices, they are still investing in major R&D projects and have introduced a number of technologies to help farmers improve their efficiency and keep their operations going even with fewer available hands. For example, Deere & Company (NYSE:DE), the largest manufacturer of agricultural equipment in the world, provides agricultural business and equipment management systems that use data collection and GPS technologies to allow farmers to control input costs and improve soil conservation, as well as reduce the use of chemicals.
Case IH, a brand of tractors owned by CNH Industrial NV (NYSE:CNHI), went even further, unveiling a concept for a completely autonomous tractor last year. Case IH also has tractors with a “follow me” function, which copy the exact movements and speed of another tractor that is being driven by a person. AGCO Corporation (NYSE:AGCO), another large agricultural equipment company, has similar technology, while Deere & Company (NYSE:DE) has introduced technology that allows a tractor to have a lot of autonomy, though it still requires a person to sit inside and monitor the process.
Moreover, with the recent advancements of self-driving technology in the automotive industry, it’s very likely that the future of farming will require a smaller number of people and more automated equipment. Goldman Sachs estimated that introducing automated tractors could increase a farmer’s revenue by 10%. At the same time, it pointed out that the developments in the agriculture sector involving equipment, irrigation, drone usage, and other aspects, could bring farm yields 70% higher by 2050.
With this in mind, let’s take a look at the top 10 largest agricultural equipment companies in the world. The companies in the list are sorted based on their revenue. For those companies that generate revenue from multiple sources, only the revenue from their agricultural operations was included, although in some cases it was not possible to measure due to lack of information.