Prices for harvesting machinery will continue to increase over the next three years due to an increase in global demand and rising input costs
Los Angeles, CA (PRWEB) October 27, 2014
Harvesting machinery has a buyer score of 2.7 out of 5. This score shows that suppliers are relatively inflexible with their prices, and that they have pricing power over buyers for their latest equipment models. Factors that negatively affect buyer power include high product specialization and high market share concentration. “Factors that positively affect buyer power are moderate price increases and low price volatility,” according to IBISWorld business research analyst Erick Delgado.
Large equipment manufacturers dominate the market and build highly specialized products that, other than used machinery, lack viable substitutes. The top manufacturers have strong brand recognition and compete by offering products with the latest technology and increased productivity. Although products from major vendors may be more reliable and efficient, their prices come at a premium that is generally nonnegotiable. “Major players have increased their market share over time by forming partnerships, merging and acquiring competitors,” says Delgado. The buyer's number of choices will diminish as vendors continue with this strategy. Despite these factors, increasing imports from foreign manufacturers are keeping equipment prices competitive. Prices for harvesting machinery have increased at modest levels in the past three years. The rising cost of inputs, higher emission standards, and increased global demand have contributed to price increases. Manufacturers have struggled to forecast their input costs due to the volatility in steel prices. This uncertainty has caused producers to keep their prices high to avoid a reduction in profits. Moreover, Environmental Protection Agency (EPA) regulations have forced manufacturers to produce equipment with lower emissions, which increased their research and development (R&D) expenses, and have resulted in end-users having to be retrained on maintenance tasks. As a result, prices are expected to increase in the three years to 2017, making it difficult for buyers to negotiate prices. However, buyers may have greater ability in negotiating interest rates, maintenance services and extended-warranty coverage. Major vendors include CNH Global N.V., Deere & Company and AGCO Corporation. For more information, visit IBISWorld’s Harvesting Machinery procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of new harvesting machinery, which is sold through manufacturers and wholesalers. Harvesting machinery consists of a wide variety of manufactured agricultural and farm equipment, including combines, mowers and windrowers, pickers, dryers, balers and gins. This report does not cover fertilizing and planting machines, mowers for lawns and parks, and residential gardening or landscaping machines. Moreover, this report does not cover the purchase of used harvesting machinery.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.