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Farm Equipment Manufacture Industry Profile Excerpt
| SIC Codes: 3523 NAICS Codes: 333111 Page Length: 10-12 Last Quarterly Update: 6/30/2008 View Sample Industry Profile |
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In the US, about 1,200 companies manufacture farm machinery and equipment, with total annual revenue of $15 billion. Large manufacturers, including Deere, AGCO, and Case New Holland (CNH), have worldwide operations. The industry is highly concentrated: the 20 largest companies hold over 80 percent of the market.
COMPETITIVE LANDSCAPE
Sales are directly tied to farm income and crop production projections for the next season, and can vary highly year to year. The profitability of individual companies depends on the volume of products sold, since many manufacturing costs are fixed. Big companies have large economies of scale, especially in manufacturing tractors and combination machines. Small companies can be successful by making specialized equipment, especially tractor attachments. Smaller companies, which are more labor-intensive, produce annual revenue per employee of about $150,000. Larger companies, more capital-intensive, produce about $350,000 per employee.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products are tractors, self-propelled harvesting combines, tractor attachments, and other equipment used for crop production and farm animal management. Smaller utility vehicles and ATVs are coming into general use on farms. Tractors account for about 30 percent of the market, combines 25 percent.
Large companies, such as John Deere, AGCO, and CNH, produce a full array of products, while smaller companies generally make a single product line. Production of diesel engines is the major separator between large and small companies, because of the large amounts of capital and expertise required. Large companies have highly automated production lines ...
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