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Brazil Agricultural Machinery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

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  • 112 Pages
  • April 2023
  • Region: Brazil
  • Mordor Intelligence
  • ID: 5318399
UP TO OFF until Jun 30th 2023
The Brazilian agricultural machinery market is projected to register a CAGR of 6.7% during the forecast period.

Key Highlights

  • Agriculture in Brazil is well developed in attaining self-sufficiency and the country is also one of the major exporters of several agricultural commodities. The country has large agricultural land and also has the potential of expanding it on a large scale. Therefore, the increase in the area of agriculture caters to the growth of the agricultural machinery market. Additionally, the increased awareness of the farmers about advanced agricultural equipment to improve production, reduction of cost of crop production, and the income-focused tendencies of farmers are pushing them to adopt the agricultural equipment in the farms.
  • Along with this, the acquisition of smaller farms by larger farm owners is increasing the consolidation of farms. The larger farms require high labor costs for farming operations. So, to reduce the cost of labor the large farm owners are preferring the employment of agricultural machinery which would the farming operations easy and cost effective.
  • Moreover, improved technology, such as precision farming, expanding planted areas, increased government initiatives, reducing import tariffs, improvements in infrastructure, and growing demand, for soybeans have been the key factors driving growth in the Brazilian agriculture equipment market.​ The market is largely dominated by the top three global players John Deere, AGCO & CNH industrial, due to the higher quality of products and better after-sales service offered by these players. Domestic manufacturing accounts for most machinery sales due to the presence of local production plants of all the major companies.​

Brazil Agricultural Machinery Market Trends

The Brazilian Farm Structure and Consolidation of Smaller Farms

  • The availability of skilled labor in Brazil is reducing compared to the increasing area under agricultural activities. As farming is a heavy job for most farmers, they depend on technology to help increase farm productivity. The agricultural land is also increasing day by day.
  • According to the Brazilian Institute of Geography and Statistics, in 2021, the planted area for agricultural production in Brazil increased from 2020, which is 83.4 million hectares to 86.7 million hectares. More farms are being consolidated in Brazil to share the cost of heavy agricultural machinery.
  • Additionally, as the bigger ones slowly acquire small farms, the need for agricultural machinery is increasing. The reason for this is the rise in urbanization is giving opportunities for the rural people through which the area under small landholding farmers is decreasing as they move to the urban area due to reduced profits from farming. The small-holding farmers produce the crop for self-consumption. So, the decrease in the number of small farmers increases the large land holdings, thereby increasing farm mechanization. Hence, the market for agricultural machinery can be expected to grow at a fast pace in Brazil.
  • Moreover, the Brazillian farms are dominated by the cultivation of sugarcane crops which require huge machinery for mainly harvesting operations. For instance, according to Food and Agriculture Organization (FAO), the area harvested under sugarcane crops in 2020 was 10 million hectares. Therefore, the larger area under the crop which utilizes the agricultural machinery is aiding the market's growth during the forecast period.

Increased Investment towards Mechanization

The farmer's investment in high-cost inputs resulted in positive yields in major crops in Brazil. The high return profits, owing to the increasing crop production and investment toward technology, and increased awareness of agriculture mechanization are pushing the farmers to adopt agricultural machinery during the forecast period. Therefore, the increased investment in high inputs by the farmers is increasing the production thereby contributing to the market growth. For instance, asp er National Association of Automotive Vehicles Manufacturers, Brazil's sales of grain combines increased from 5,580 units in 2019 to 5,614 units in 2020. Further, the export value of agricultural machinery also increased from USD 192.1 million in 2020 to USD 236.6 million in 2021.

With the large machinery production capacity, the Brazilian industry has also invested in advanced technology, mainly in tractors and combines, to save time and fuel, lower the level of fatigue and reduce cost. This investment is impacting the sales of agricultural machinery in a positive way. But the pandemic showed a slight decrease in sales. Moreover, one of the major players in the agricultural farm machinery market in Brazil, AGCO Corporation has increased its investments in developing innovative and technology-supported farm machinery. According to its annual report, the company has accelerated its innovation and investment progress in smart solutions throughout 2021, by a rise in R&D spending of more than USD 60 million compared to 2020. It has also acquired Headsight, a software and app development company which the company claimed will bring smart solutions to harvesting, Faromatics, and others.

Furthermore, the Brazilian government released Crop Plan for the 2022-23 season. This bill allows small farmers in the country to get credit to buy agricultural machinery at a 5% annual interest rate. Therefore, the advancements in technology and mechanization of the production systems of major crops such as soyabean are anticipated to increase the growth of the market in the forecast period.

Brazil Agricultural Machinery Market Competitor Analysis

The Brazilian agricultural machinery market is relatively consolidated, and it is dominated by global manufacturers such as Deere and Company, Mahindra and Mahindra Ltd, CNH Industrial, Kubota Corporation, and AGCO Corporation, among others, as they hold the major market share. Farmers prefer international companies for assurance of quality and after-sales services offered by the big companies. Machines manufactured domestically account for most sales, as most international companies have their local production setups in the country.

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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Porter's Five Forces Analysis
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Buyers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5.1 Tractors
5.1.1 Below 80 HP
5.1.2 81 to 130HP
5.1.3 Above 130 HP
5.2 Ploughing and Cultivating Machinery
5.2.1 Ploughs
5.2.2 Harrows
5.2.3 Cultivators and Tillers
5.2.4 Other Ploughing and Cultivating Machinery
5.3 Planting Machinery
5.3.1 Seed Drills
5.3.2 Planters
5.3.3 Spreaders
5.3.4 Other Planting Machinery
5.4 Harvesting Machinery
5.4.1 Combine Harvesters
5.4.2 Forage Harvesters
5.4.3 Other Harvesting Machinery
5.5 Haying and Forage Machinery
5.5.1 Mowers
5.5.2 Balers
5.5.3 Other Haying and Forage Machinery
5.6 Irrigation Machinery
5.6.1 Sprinkler Irrigation
5.6.2 Drip Irrigation
5.6.3 Other Irrigation Machinery
6.1 Market Share Analysis
6.2 Most Adopted Strategies
6.3 Company Profiles
6.3.1 John Deere Brasil Ltda
6.3.2 AGCO do Brasil
6.3.3 CNH Industrial Brasil Ltda
6.3.4 Kubota Tractor Corp.
6.3.5 Claas KGaA mbH
6.3.6 Mahindra and Mahindra Ltd
6.3.7 Massey Ferguson

Companies Mentioned

A selection of companies mentioned in this report includes:

  • John Deere Brasil Ltda
  • AGCO do Brasil
  • CNH Industrial Brasil Ltda
  • Kubota Tractor Corp.
  • Claas KGaA mbH
  • Mahindra and Mahindra Ltd
  • Massey Ferguson