Global Variable Rate Technology Market 2021
The global variable rate technology market is expected to witness significant growth during the forecast period, reaching a value of $6.09 billion by 2027 with a CAGR of 20.28%. The increasing demand for agricultural output and the decreasing labor force in the agriculture industry are the key drivers behind this growth.
Agriculture plays a crucial role in the global economy, accounting for 4.3% of global GDP in 2021 and even higher percentages in emerging nations like India. To boost agricultural production and the economy, there has been a shift from conventional to modern farming practices such as variable rate technology (VRT). With larger average farm sizes and rising input costs, food producers are adopting VRT to optimize their operations. According to the United States Department of Agriculture (USDA), agricultural production costs are projected to continue rising, leading to increased adoption of cost-effective technologies like VRT.
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USD 2 billion in 2020
Application, Technology, Solution, Region
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While the global variable rate technology market is still in its introductory phase in developing countries, it has reached the growth phase in developed nations. Research and development activities are underway globally to develop highly productive VRT products. Governments across nations are also focusing on sustainable agricultural production, which is expected to drive further demand for VRT.
One major opportunity in the market lies in tapping into the smallholder farmer segment with affordable VRT solutions for agricultural input application. Start-ups are emerging to provide such solutions, aiming to gain a competitive edge by targeting this segment. However, the adoption rate of VRT is relatively low, around 14.1%, highlighting significant growth potential in the US and other countries.
The decline in agricultural labor populations and the increasing labor costs have created a need for efficient technological solutions to bridge the supply and demand gap in the industry. Automation is expected to play a crucial role, presenting more opportunities for VRT in the agriculture sector. The outbreak of COVID-19 further emphasized the benefits of investing in technologies instead of relying solely on the workforce. The pandemic-induced labor shortage negatively impacted production, making farmers realize the financial benefits of adopting VRT.
The demand drivers for the global variable rate technology market include the rapid adoption of precision agricultural technologies, the need for workforce automation in agriculture, and the need for input optimization. However, the market also faces limitations such as a lack of standardization hindering VRT performance, high initial investment costs, and lagging adoption among smallholder farmers.
The market is segmented based on various factors, including application, technology, solution, and region.
Segmentation by Application
Variable Rate Fertilization (VRF)
Variable Rate Seeding (VRS)
Variable Rate Irrigation (VRI)
Variable Rate Crop Protection Chemical (VRC)
Segmentation by Technology
Segmentation by Solution
Segmentation by Region
North America – U.S., Canada, Mexico, and Rest-of-North America
Europe – Germany, France, Italy, and Rest-of-Europe
Asia-Pacific and Japan – Japan, Australia, India, and Rest-of-Asia-Pacific and Japan
South America – Brazil, Argentina, and Rest-of-South America
Middle East and Africa – Israel, South Africa, and Rest-of- Middle East and Africa
During the forecast period, the variable rate fertilization segment is expected to dominate the application segment of the global variable rate technology market. This can be attributed to the increasing awareness of the risks associated with over-applying fertilizer to the soil and the rising costs of fertilizers. These factors drive the demand for variable rate fertilization in the market. It is anticipated that variable rate fertilization will hold a significant market share during the projected period, with North America, South America, and China experiencing high compound annual growth rate (CAGR) in this segment. These regions are focusing on avoiding excessive fertilization to maintain soil fertility.
In terms of technology, the map-based technology segment is expected to have a slight dominance in the global variable rate technology market during the forecast period. This is primarily due to the limited availability of suitable sensors for collecting soil and plant data. The input for the variable rate controller can be obtained through either map-based or sensor-based technology. However, map-based technology is projected to hold a larger market share due to its lower initial investment costs compared to sensor-based technology. Additionally, map-based technology provides reliable results by utilizing various data sources to create prescription maps. Developing countries such as India, Brazil, and others are expected to adopt map-based technology due to its affordability through the use of satellite imagery. On the other hand, sensor-based technology is predicted to gain market share in developed nations like the U.S. and the U.K. due to its accurate and time-efficient output generation.
In the solution segment, the hardware solution is expected to dominate the global variable rate technology market during the forecast period. This is because the hardware solution requires high-cost components such as receivers, control systems, and sensors. Manufacturers in the market offer hardware, software, and services solutions. While the hardware segment is concentrated with established players, the software segment has fewer established players but many emerging startups. The hardware sector is anticipated to dominate the market due to its higher income generation compared to the other two segments. However, the software solution is expected to have the highest compound annual growth rate (CAGR) during the forecast period. This is attributed to the constant addition of new features by software providers to differentiate their products and gain a competitive edge.
In terms of geographical revenue generation, the U.S. topped the list with $570 million in revenue in 2021. Factors contributing to the rapid growth rate in the U.S. include the increasing production of high-value crops and the short payback period for variable rate technology investments in high-value crop production. North America and Europe are expected to have the highest demand for variable rate technology due to rising agricultural input costs, particularly for fertilizers, and the increasing average field size. Asia-Pacific, Japan, and South America are progressively adopting variable rate technology, thanks to research and development efforts, as well as experimental field studies conducted by institutions and government organizations to assess the economic benefits of VRT. China, in particular, is witnessing an increase in the use of variable rate technology due to technical training provided to farmers on precision agricultural technologies. The Middle East, Africa, and the UK are experiencing rapid growth in startups and a need for effective input utilization in food production to reduce costs, thereby driving the adoption of variable rate technology.
The global variable rate technology market exhibits a high degree of consolidation, characterized by the presence of a limited number of established players and a smaller number of emerging start-ups. These market participants engage in intense competition, focusing on factors such as product offerings, pricing, innovation, and customized services. In terms of product offerings, the players strive to provide solutions that cater to diverse crop types and applications. Regarding pricing, the hardware used in variable rate technology entails high component costs and a long lifespan, leading VRT providers to primarily leverage software and service pricing strategies in order to attain a competitive edge.
The selection of profiled companies was based on inputs sourced from primary experts, as well as analysis of company coverage, product portfolios, and market penetration.
Among the key players, public companies operating in the global variable rate technology market held a substantial market share of approximately 62% in 2021. The remaining market share of 38% was accounted for by private and start-up companies.
Key companies profiled in this report include AGCO Corporation, Climate LLC, CNH Industrial N.V., Deere & Company, Farmers Edge Inc, Hexagon Agriculture, Kubota Corporation, Lindsay Corporation, Topcon Corporation, Trimble Inc, Valmont Industries, Yara International, Ag Leader Technology, Crop Quest Inc, DJI, CropX Inc., DataFarming Pty Ltd, HUMMINGBIRD TECHNOLOGIES LIMITED, OneSoil, Sentera.
Recent Industry Developments
In August 2021, AGCO Corporation introduced the Massey Ferguson VE series planters, which cater to a wide range of growers, including those practicing both conventional and no-till operations. These planters incorporate advanced technologies such as variable-rate, high-speed planting, and individual row control.
In August 2020, Lindsay Corporation launched FieldNET with a water trend feature, enabling growers to gain valuable insights into crop water usage. This technology utilizes satellite imagery, allows customizable irrigation parameters, and provides continuously updated variable-rate irrigation prescriptions.
In November 2021, CNH Industrial N.V. completed the acquisition of Raven Industries Inc. This acquisition marked a significant milestone in CNH Industrial N.V.’s digital transformation efforts and further strengthened their longstanding collaboration.
In January 2020, Lindsay Corporation formed a partnership with Farmers Edge Inc to seamlessly integrate their digital platforms. This collaboration resulted in a comprehensive crop management software suite, accessible to both Lindsay Corporation’s producers and dealer networks.
Key Questions Answered
What is the projected revenue and compound annual growth rate (CAGR) of the global variable rate technology market during the forecast period 2022-2027?
What are the key trends, market drivers, and opportunities in the global variable rate technology market?
What are the major factors restraining the growth of the global variable rate technology market?
What strategies are the existing market players adopting to expand their market position in the industry?
What is the competitive strength of the key players in the global variable rate technology market based on their recent developments, product offerings, and regional presence?
How do the key global variable rate technology market players in the agriculture sector compare in terms of market coverage and potential?
What is the expected revenue and growth percentage for each segment during the forecast period?
Which players and stakeholders are involved in the global variable rate technology market ecosystem, and what is their significance in the global market?
Which consortiums and associations are leading in the global variable rate technology market, and what roles do they play in the market?