Editor’s note: This story is part of an ongoing series called “Smart Moves for 2027,” which outlines steps to guide farmers in the coming year.
There’s an amusing anecdote that goes given baling wire and duct tape, farmers can keep almost any implement running.
Although this exaggerates the current picture, it summarizes how farmers approach new equipment purchases. Through September, U.S. tractor sales trailed last year by 12.6%, totaling 135,325 units. Meanwhile, combine sales decreased almost 10% in the same time frame at 2,432 units, according to Association of Equipment Manufacturers data.
“We don’t buy a lot of new equipment,” said Dave Walton, a Wilton, Iowa, farmer who serves as vice president of the American Soybean Association. “When we buy, it’s a lot of one-owner implements. We also do a lot of repair work ourselves. It helps control costs, and we also don’t take the depreciation hit on new equipment.”
Besides tight farm economics, tariffs also aggravate farm machinery sales.
“They create a headwind of a magnitude that we've never dealt with before in the industry,” said Ryan Schaefer, vice president of New Holland North America. “They have escalated raw material costs to a point that has been very difficult for us to swallow as a manufacturer. We have been forced to pass some costs along to customers, as has everyone in the [machinery] industry. But we've absorbed a tremendous amount of cost in hopes that most of the current dynamics are transitory.”
Time to update?
Machinery sales may change. Improved crop revenues triggered by higher commodity prices, stabilized working capital, and government and crop insurance payments could drive farmers to update their machinery line.
Machinery upgrades cost money. However, delayed field operations caused by under-capacity machinery or machinery breakdowns also cost cash.
“You have to understand the value that new equipment provides to your operation, or even upgrades to used equipment,” Schaefer said. “That is what separates the farmers who are growing from the farmers who are consolidating. It can be a disaster if you can’t plant or harvest on time.”
Changes in buying patterns
Skyrocketing diesel prices also may drive machinery upgrades.
“While diesel prices may not be enough to move the needle all the way, they might be enough to push a farmer to say, ‘Hey, I need to replace this machine,’” said Eric Gibson, a Rabobank farm input and crop production sustainability analyst.
Spiraling diesel prices may open another machinery niche.
“We see two machinery trends, with the main one being bigger machinery,” Gibson said. “But there are a few companies that focus more on the smaller scale, such as drones. Drones aren’t a perfect substitute, but they are complementary [to large sprayers]. In this high diesel price environment, this changes the purchase calculus.”
Spending $40,000 on a drone sprayer compared with $600,000 for a new self-propelled sprayer may appeal to some farmers, he added.
“If you are in midseason and borderline as to if your corn crop needs another fungicide application, you may be able to use a drone to spray problem areas instead of a whole field with a large sprayer,” Gibson said.