Daedong, LS Mtron, TYM hit by decreasing no. of North American hobby farmers

Daedong’s agricultural machines are on display at its exhibition booth during the National Farm Machinery Show in the U.S. state of Kentucky in this February 2022 file photo. Courtesy of Daedong

By Park Jae-hyuk

The declining popularity of hobby farming in North America after the end of the COVID-19 pandemic has worsened the profitability of Korea’s three largest farming machine makers, which faced a sharp drop in their exports last year, according to industry officials, Tuesday.

From left are Daedong CEO Won Yu-hyun, LS Mtron CEO Shin Chai-ho and TYM Chairman Kim Hi-yong. Courtesy of each company

Daedong, LS Mtron and TYM, which have trisected the Korean agricultural equipment market, enjoyed record sales in 2022, thanks to the soaring demand for their compact tractors in North America.

In 2023, however, Daedong suffered a 2 percent year-on-year drop in its sales to 1.4 trillion won ($1 billion) and a 26 percent fall in its operating profit to 65.4 billion won. The Daegu-based company attributed this trend mainly to the shrinking size of the global farming machinery market.

“Compared to 2022, North America’s market for tractors with engine power under 100 horsepower saw around 11 percent decline in size,” the company said in a press release.

LS Mtron, which also produces industrial machinery and electronic components, faced a 16 percent year-on-year drop in its 2023 revenue to 1 trillion won and a 22 percent decrease in its operating profit to 39.3 billion won. The company’s regulatory filing showed its revenue from exports went down sharper than that from domestic consumption.

“Following the declaration of the end of the COVID-19 pandemic, the North American tractor market’s size shrank by 17 percent,” the LS Group affiliate said in its regulatory filing. “The domestic market slump and decreasing profits from original equipment manufacturing also caused drops in our sales and operating profit.”

President Yoon Suk Yeol, left, waves while driving TYM’s autonomous rice planting machine on a rice paddy in Buyeo County, South Chungcheong Province, in this June 2023 file photo. Courtesy of presidential office

TYM posted 836 billion won in 2023 sales, down 28.2 percent from a year before, and an operating profit of 76 billion won, down 37.3 percent.

“A report from the Association of Equipment Manufacturers showed that the North American tractor market’s size further shrank by 16 percent year-on-year during the first two months of 2024,” the company said in a press release. “Experts attributed the sluggish sales to decelerating growth in hobby farmers and high interest rates that have worsened consumer sentiment.”

In response to the tough business environment, the three companies have struggled to increase their respective shares in the North American market with their autonomous machines and broader sales networks.

Replacing its executives at the North American subsidiary, Daedong vowed to expand its share in North American markets for larger tractors and ground maintenance equipment. It also promised to focus more on futuristic technologies using artificial intelligence and robotics.

LS Mtron emphasized that its market share in North America grew last year, despite the difficult conditions. TYM also said it increased its sales and market share in North America during the first two months of this year by raising its brand awareness.

“With the expansion of our manufacturing facilities and sales of larger products, we will increase our share in the North American market,” a TYM official said.