The demand for food supply is continuously increasing due to growing world population. Hence, various economies are focusing on increasing their capability to produce more food through using modern agricultural machinery. Farmers are trying to yield maximum amount of crops through using advanced farming techniques such as precession and integrated farming. Use of advanced agricultural machinery is an important factor for these types of farming techniques. Hence, farmers are focusing on using agricultural machinery to increase farm yield from limited land resource. Agriculture machinery helps in effective utilization of resources such as land and labor. Moreover, use of agricultural machinery helps in reducing manual labor for farming activities. Farmers use agriculture equipment for tillage, sowing, plant protection and threshing. The demand for dairy products in recent years has also increased demand for dairy farming. Dairy farmers are preferring automated feeding and milking equipment to fulfill demand and save time in dairy farming sector.

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The market for agricultural machinery can be segmented based on farm size. Farmers having large-size holding prefer using agricultural equipment which has more horsepower and can be used in large scale farm operation. On the other hand, farmers having small-size holding prefer using agricultural equipment having less horsepower. Thus, the cost of agricultural equipment mostly depends upon the power of the equipment. Currently, farmers with small holding have started using modern agricultural equipment to optimize their resources and save considerable cost and time.

Agricultural machinery market can be segmented depending upon farming operations such as farm tractors, harvesting machinery, fertilizing and planting machinery, cultivating and plowing machinery, threshing machinery and dairy equipment. Among these segments, the demand for farm tractors is going to increase in coming years. Farm tractors are largely used by small and large farmers for performing different type of agriculture operations. Through joining different attachments, a farm tractor can be used for tillage, seeding and transportation purpose. Thus, the market demand for tractor parts and attachments is also going to grow in coming years.

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The demand for agricultural equipment is mainly driven by the projection of crop production in next season or year. Thus, the demand for agricultural machinery can vary from year to year. Hence, most of the governments provide subsidy to farmers for buying agricultural machinery or equipment. This factor will help agricultural machinery market to grow in coming years.

Agriculture machinery manufacturers mostly prefer selling low power farm equipment such as tractors, harvesters to developing economies which have lower purchasing power. Farmers in these economies often rent large agricultural equipment for their farming operations. Hence, the demand for large agricultural equipment in developing economies is going to increase at a slow rate in coming years. In developed countries, agricultural machinery manufacturers mostly sell high power farming equipment as most of farmers own large farm land.

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Most of the agricultural machinery market in developing economies is dominated by regional players who focus on providing small and low power agriculture equipment to farmers. This can be a major challenge for large agricultural machinery manufacturers for expanding their market in developing economies in coming years. The market for agriculture machinery will continue to increase in developed economies such as North America and Europe due to large farm land and limited availability of labor. The growing demand of food supplies in countries such as China and India will increase the demand for low power agriculture machinery in coming years.

Some of the key agricultural machinery manufacturers operating at a global level are Deere & Company, CNH Global NV, AGCO Corporation, Kubota Corporation, CLAAS KGaA mbH, Yanmar Co. Ltd, Escorts Group, Mahindra & Mahindra Ltd, Tractors & Farm Equipment (TAFE) Ltd and Caterpillar Inc.