It’s been an eventful year for the industry. The Agriculture Equipment market size exceeded USD 120 billion in 2021 and is projected to grow at a 10% CAGR from 2022 to 2028 . After the strain on equipment manufacturing in 2020 during the pandemic, the industry was able to recover in 2021 and 2022, despite ongoing supply chain backlogs. Rising demand for large, self-propelled machinery and, in general, an increased emphasis on mechanization in North American agriculture are some of the industry's major growth drivers. But due to ongoing supply shortages, the cost of equipment remains high. Here are some changes and trends happening in the Ag Equipment market.
INFLATION ACROSS THE NATION
Inflation is pushing prices in the global supply chain higher, and the cost of equipment has surged as a result. This challenge is compounded by labor shortages , due in part to low population growth, immigration policy, and retiring baby boomers with fewer people in younger generations interested in filling their roles. Many dealers will need to find ways to increase efficiency at their dealerships with the resources they currently have. Meanwhile, customers are looking toward autonomous machinery to boost their productivity. What’s more, rising fuel costs are driving customers to explore electrification sooner. HIGH DEMAND, SHORT SUPPLY
According to a DIS survey of Ag dealers across North America, 78% cited rising product prices as one of the biggest challenges they expect to face in the year ahead, and 62% cited rising interest rates.
Although it’s expected that current supply chain shortages will continue to impact the industry, industry experts are optimistic that stocking levels will improve over the course of 2023.
As many dealers still struggle with having enough surplus inventory, it’s especially important to leverage your dealer management system to do cycle counts, audit inventory, and smarter parts management. You can also utilize manufacturer inventory management programs to track accurate stocking levels. If you don’t have a DMS that integrates with your OEM inventory management program, it may be time to consider finding one that does.
I think we will continue to struggle with supply issues and as dealers will have to get more creative solving customer needs. I also feel a stronger digital presence will be required as our customers change how they do business.
PAT MCCRABB J.J. Nichting Co
2
Powered by FlippingBook