Despite weak commodity prices and high costs adversely impacting the near-term outlook of the Zacks Manufacturing - Farm Equipment industry, it will gain from sustained demand for agricultural equipment required to feed a growing population. Major players like Deere (NYSE: DE), Kubota (OTC: KUBTY), AGCO Corporation (NYSE: AGCO) and Lindsay (NYSE: LNN) are well-poised to benefit from this demand by expanding their product offerings. The industry's emphasis on revolutionizing agriculture with technology to make farming automated is expected to be a major catalyst. Companies like Deere, CNH Industrial and AGCO are thus investing heavily in upping their technology game. About the Industry The Zacks Manufacturing - Farm Equipment industry comprises companies that manufacture agricultural equipment. These equipment include tractors, combines, cotton pickers and harvesting equipment; tillage, seeding and application equipment, consisting of sprayers, nutrient management and soil preparation machinery; and hay and forage equipment, comprising self-propelled forage harvesters and attachments, balers, and mowers. Some companies in the industry produce turf and utility equipment, consisting of riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, commercial mowing equipment and garden tillers and snow throwers. Some participants in the industry also manufacture irrigation equipment. Deere, CNH Industrial and AGCO presently hold the foremost positions as the top three global manufacturers of agricultural equipment (in that order). Trends Shaping the Future of the Manufacturing - Farm Equipment Industry Low Commodity Prices Act as a Woe: Soybeans' prices have decreased 9.5% so far in 2024 and corn prices have declined 14.2%. Deteriorating agricultural commodity prices, high interest rates and production costs have affected farmer sentiment. This, in turn, is weighing on agricultural equipment demand. Wheat, corn and soybean prices are likely to decline due to high inventory levels and expectations of an increase in supply. Also. demand in China for soybeans is expected to go down due to the government's efforts to reduce and substitute the use of soybeans in animal feed to decrease reliance on imports. The U.S. Department of Agriculture projects a net farm income of $116.1 billion for 2024, indicating a decline of 25.5% from 2023. Low farm income will continue to influence farmers' investment decision-making until conditions stabilize. High Costs & Supply-Chain Issues Are Worrisome: The industry has not been immune to the rampant cost inflation prevailing in the sector. Constraints on the availability of raw materials, labor and trucking resources have led to higher lead times for deliveries. Need for Food to Drive Demand for the Industry: Despite the volatility in commodity prices, agricultural equipment demand will be supported by increased global demand for food stemming from population growth and an increasing proportion of the population aspiring for better living standards. In the United States, the agricultural machinery market is forecast to reach $39.56 billion in 2024. It is expected to reach $53.7 billion in 2027 at a compound annual growth rate (CAGR) of 6.3% between 2024 and 2027. Farm size has been on the rise in the United States, which calls for more laborers. Given the escalation in labor costs every year, farmers are resorting to farming ...