Support from Mexican government, high replacement demand in the industry and huge export of agricultural products to Central and South America were the major growth drivers of Mexico agricultural equipment market over the years.
In Mexico, agriculture is the third most important economic activity which contributes about 3.2% to the country gross domestic product (GDP). Almost 22% of Mexico’s population lives in rural areas with a little under half (44%) of the rural population has been actively employed in agriculture. Huge dependence on agriculture for a living has majorly driven the demand for agriculture machinery and equipments in the country. The agriculture sector in Mexico is driven by greater use of modern day agricultural equipment backed with support of Mexican government to the agriculture industry. The Mexican government is keen to strengthen the food security of the market which has encouraged the growth of smart agriculture in the country. However, changing weather conditions along with labor availability issue has negatively affected the agriculture market to some extent but Mexican agricultural equipment market has witnessed consistent growth over the years.
The relatively shorter shelf-life of the product in the market has resulted in more frequent sales of agricultural machinery and as the machinery owners have been rising in Mexico, the agricultural equipment market has grown consistently over the years. Tractors are the leading segment in the market which has accounted for huge proportion of the overall sales. Mexico has witnessed recovery of the agricultural sector since the last two years owing to counter-cyclical nature of growth and recovery in the sector, coupled with increase in exports of agricultural products to Central and South America. Additionally, the government of Mexico is encouraging mechanization of farms which has aided the growth of sales of tractors in the country. Rising demand in plant machinery market due to scarcity of farm labor, high farm income, farm consolidation and widespread usage of tractors have driven the sale of planting machinery in the country.
The report titled “Mexico Agricultural Equipment Market by Major Products (Tractors, Combine Harvesters, Tractor Implements and Rice Transplanters), By Application (Land Development, Sowing & Planting, Weed Cultivation, Harvesting & Threshing, Post-harvest & Agro Processing), By Planting Equipment (Row Crop Planters, Air Seeders, Grain Drills and Others) and By Major Regions – Outlook to 2022” by Ken Research suggested that growing sale of planting machinery coupled with increasing demand of food will majorly account for the overall revenue growth of Mexico agricultural equipment market in next 5 years till 2022.
Ankur Gupta, Head Marketing