The farm equipment rental market is estimated to be valued at USD 57.17 Bn in 2024 and is expected to reach USD 87.82 Bn by 2031, growing at a compound annual growth rate (CAGR) of 6.3% from 2024 to 2031. The growing demand for farm machinery and the rising ownership costs of newer agriculture equipment is driving more farmers to opt for renting over owning, contributing to the growth of the farm equipment rental market.

Market Driver - Increasing Mechanization in Agriculture Tasks

With growing populations and shrinking arable land, farmers are under increasing pressure to produce more food using limited resources. At the same time, migrating workers from farms to cities in search of higher paying jobs has worsened farm labor shortages in some regions.

The shift to mechanization is happening rapidly across both developed and developing nations. In the US, farm machinery has played a key role in boosting crop yields to meet the needs of a growing nation for over a century. Now countries like India and China are also encouraging greater use of equipment like tractors, harvesters and irrigation systems on smallholder farms.

While mechanization delivers productivity gains, the heavy capital cost of tractors and combine harvesters puts them out of reach for many small and marginal farmers. This is where farm equipment rentals have gained popularity. Rural equipment banks have also been set up under cooperative models for farmers to jointly own and share expensive farm machinery.

The farm equipment rental model lowers barriers to entry for mechanized agricultural practices, allowing even small landholders to reap productivity and time savings without having to bear the full starter costs. This trend is poised to further accelerate agriculture mechanization across the global landscape in the coming years.

Market Driver - High Upfront Costs Drive Demand for Rental Solutions

The high upfront expenditures act as a deterrent especially for smallholder farmers with limited access to agricultural credit. Even some medium or large-scale farming businesses in developed nations find it challenging to justify the steep costs when calculating returns over the machinery’s lifecycle and payback periods.

Meanwhile, seasonal requirements also do not justify permanent ownership for all farmers. Renting machinery on an as-needed basis has proved a practical alternative in this scenario. It transfers both acquisition and maintenance expenses to specialized third-party fleet owners while guaranteeing farmers access during critical operations.

Equipment rental companies have therefore emerged as an affordable option fulfilling the temporary mechanization needs of diverse farm sizes. Their large fleets ensure requisite implements are available when demanded. They also handle repairs and upgrades, absorbing equipment lifecycle costs. This rental model has found worldwide acceptance, enabling increased levels of mechanized agriculture worldwide in a capital-efficient manner. It also facilitates precision services and latest technologies reaching even smallholder growers.

Market Challenge - Unavailability of Rental Equipment during Peak Seasons

One of the major challenges faced by the farm equipment rental market is the unavailability of equipment during peak seasons. The demand for rental equipment, especially tractors, significantly increases during planting and harvesting seasons. However, equipment rental companies often struggle to meet this high seasonal demand due to limitations in fleet size and capacity.

Many small and medium farmers who cannot afford to purchase expensive agriculture machinery rely on renting equipment during these peak periods. Due to shortage of equipment during busy seasons, farmers often have to wait for long durations to get equipment on rent, which can delay critical farming operations.

Also, due to high demand, equipment rental prices also tend to surge during planting and harvesting seasons, raising operating costs for farmers. If this challenge can be successfully addressed, it will help boost farm output and profitability as well as growth of the farm equipment rental market.

Market Opportunity - Development of Technologically Advanced Rental Tractors and Services for Market

One of the major opportunities in the farm equipment rental market is the development of technologically advanced rental tractors and complementary services catering to customers' needs. There is a large scope to introduce latest model tractors equipped with advanced technologies such as GPS, auto-guidance and telemetry systems. This will help improve farm efficiency and productivity.

Equipment rental companies can also offer value-added services like turnkey customized farming solutions, precision farming advisory, and equipment maintenance packages. These can help enhance customer experience and satisfaction.

By focusing on innovation, newer business models such as pay-per-use of tractors on a usage-based model can be explored. This reduces initial investment needs for farmers and provides new revenue streams for rental businesses. Overall, leveraging emerging technologies and offering wide-ranging solutions present a major avenue to accelerate growth in the lucrative farm equipment rental market.

Technology enabled services: Players are focusing on technology-driven solutions to enhance customer experience. For instance, John Deere launched JDLink telematics system in 2015 that allows real-time monitoring of equipment condition and performance. This helps improve fleet utilization and uptime.

Service & repair network: Establishing a strong network of dealers and workshops helps players provide fast maintenance support and repairs. AGCO has over 3,500 dealer locations globally to serve customers efficiently. Its local presence ensures farmers face minimal downtime.

Flexible rental periods: Players offer flexible rental periods ranging from few hours to multiple seasons based on the crop cycle. For example, during the 2008 financial crisis, Ritchie Bros allowed customers to rent for daily/weekly basis instead of fixed long-term leases. This rental period flexibility helped drive demand.

Acquisitions & partnerships: Players pursue inorganic growth by acquiring regional brands to strengthen geographic footprint. In 2018, United Rentals acquired BlueLine Rental for $690 million to expand presence in Canada. Partnerships with ag inputs companies help players gain more access to end customers.

Insights, By Equipment: Ubiquity of Basic Tractor Functions Drives Tractor Dominance

In terms of equipment, tractors account for 39.2% share of the farm equipment rental market in 2024, owning to the ubiquity of their basic functions. Tractors represent the backbone of most fundamental farm operations, from tilling and plowing fields to hauling equipment and materials. Additionally, tractors can be outfitted with various interconnected attachments that expand their functionality for specialized jobs like planting, fertilizing, herbicide/pesticide application and harvesting.

With their ability to perform so many core farming processes, tractors remain irreplaceable for domestic and commercial agricultural enterprises alike. The mainstay position tractors occupy in everyday farmwork has cemented their prominent share of the farm equipment rental market.

Insights, By Power Output: Convenience and Common HP Needs Boost the 41HP to 100HP Segment

In terms of power output, the 41 HP to 100 HP segment holds 47.5% share of the farm equipment rental market in 2024. This is due to the convenience and common power needs 41-100HP farm equipment fulfill for many agricultural jobs. Tractors in this mid-range horsepower bracket have enough power for a wide span of standard fieldwork and material handling yet are still reasonably sized and maneuverable.

Furthermore, requiring only a basic operator's license, 41HP to 100HP tractors provide a flexible, hire-and-go solution for peak seasons when additional tractor power is needed temporarily. Their fuel efficiency and lower initial price point compared to higher-HP models also make this segment attractive for cost-conscious farming operations.

As a 'goldilocks' option meeting routine power demands for numerous agricultural enterprises, the popularity of 41HP to 100HP tractors drives their leadership in the farm equipment rental market.

Insights, By Drive Type: Superior Traction and Mechanical Simplicity Favor 2WD Segment

In terms of drive type, the two-wheel drive (2WD) segment contributes the highest share of the farm equipment rental market owing to its superior traction and mechanical simplicity. While 4WD and MFWD tractors can negotiate rougher conditions, the majority of daily fieldwork is best managed with basic rear-wheel drive, which 2WD tractors provide.

Additionally, 2WD models have lower initial and ownership costs without superfluous features for applications where rear-wheel traction is sufficient. The straightforward mechanics of 2WD also make for quicker, easier maintenance. Overall, the straightforward design and strong traction control of 2WD tractors in standard farming environments explains their prevalent position within the farm equipment rental market.

• Asia-Pacific Leading Growth: The Asia-Pacific region accounts for approximately 35.7% share of the farm equipment rental market, driven by small-scale farmers seeking affordable farm equipment solutions.
• The North American region in the farm equipment rental market is projected to grow at a CAGR of 5.94% during the forecast period, mainly due to advancements in agricultural technology.
• Adoption of Precision Farming: Around 42.5% of farm equipment rentals now includes precision farming technologies, indicating a shift towards more efficient farming practices.
• Collaborative Farming Models: Farmers in European farm equipment rental market have started forming cooperatives to collectively rent equipment, reducing individual costs and promoting shared resource utilization.
• Expansion of Rental Fleets: Companies in the farm equipment rental market like AGCO Corporation have expanded their rental fleets to meet the growing demand for advanced agricultural technologies.

The major players operating in the farm equipment rental market include Deere & Company, CNH Industrial, AGCO Corporation, Kubota Corporation, Mahindra & Mahindra, Flaman Group of Companies, Pacific AG Rentals LLC, Messick's, CLAAS KGaA mbH, The Papé Group, Inc, Escorts Limited, J.C. Bamford Excavators Limited (JCB), SDF Group, and Yanmar Holdings Co., Ltd.

• In September 2024, Kubota North America Corporation acquired Bloomfield Robotics, a startup that specializes in using advanced imaging and artificial intelligence to monitor the health and performance of specialty crops. This acquisition aims to enhance predictive maintenance and optimize equipment usage, aligning with Kubota's strategic vision for smart agriculture.
• In February 2024, Deere & Company unveiled a new lineup of four-track tractors as part of the 9RX Series. This series includes models with engine power reaching up to 830 horsepower, making it the company's most powerful tractor to date.
• In July 2023, Pacific AG Rentals LLC partnered with Burro, a company based in Philadelphia that specializes in autonomous mobility solutions for the agricultural sector. This partnership aims to introduce Burro's autonomous robots into Pacific AG Rentals' farm equipment rental fleet. The collaboration is expected to provide broader access to these innovative robotic technologies across the United States.
• In June 2023, John Deere launched a new digital platform aimed at enhancing their farm equipment rental services. This initiative is designed to give farmers easier access to advanced machinery, ultimately improving operational efficiency, and productivity. The platform simplifies the ordering process for farming equipment rental services, ensuring that users can quickly acquire the machinery they need​.

• By Equipment
  • Tractors
    • Utility Tractors
    • Row Crop Tractors
    • Industrial Tractors
  • Harvesters
    • Combine Harvesters
    • Forage Harvesters
  • Balers
    • Round Balers
    • Square Balers
  • Sprayers
    • Self-Propelled Sprayers
    • Trailed Sprayers
  • Other Equipment
    • Planters
    • Tillers
    • Plows
• By Power Output
  • 41 HP to 100 HP
  • Less than 40 HP
  • More than 100 HP
• By Drive Type
  • Two-Wheel Drive (2WD)
  • Four-Wheel Drive (4WD)
    • Mechanical Front Wheel Drive (MFWD)
    • Articulated 4WD