Economic uncertainty is having an uneven impact on the farm equipment market. Equipment sales are down and so are used-machinery prices. U.S. sales of new ag tractors dropped by 17%, and combine sales cratered by 48% in February.
Curt Blades, senior vice president at the Association of Equipment Manufacturers, blames “global trade concerns and tariffs” for the decline. Across the border in Canada, sales of agricultural tractors increased 18.6% in February, while combine sales sank 32.1%.
But while the short-term outlook is grim, equipment brands are betting on technology: “We continue to remain optimistic about the long-term future of agricultural equipment,” Blades says about the data found in advocacy organization’s latest farm equipment market report. “The resilience and adaptability of our industry have been proven time and time again. We are confident that through innovation and collaboration, equipment manufacturers can navigate these challenges and emerge stronger, continuing to support the essential work of farmers and agricultural professionals worldwide.”
This perspective aligns with various ag machinery market outlook reports. Last year, the global farm equipment market size was valued at $193 billion. It’s projected to increase to $207 billion this year, and $344 billion by 2032, according to a February report from Fortune Business Insights. Researchers attribute this expansion to shrinking labor availability and increasingly automated farm operations.
In the immediate term, however, the ag machinery sector faces a challenging season:
- Agco’s net sales last year dropped 19% year over year.
- CNH Industrial’s 2024 revenue declined 28%.
- John Deere’s first-quarter revenue slumped 30% compared to last year.
John May, chairman and CEO at John Deere, says the company is focused on “optimizing inventory levels of both new and used equipment amidst the uncertain market conditions our customers are facing.”
Used-equipment sales level off
Inventory for used tractors above 100 hp remained steady in February, with a slight month-over-month increase from December and a 6% jump over the same time last year, according to Sandhills Global’s most recent market report. Inventory of 100- to 174-hp machinery increased 2.3%, while inventory for those above 300 hp went up more than 12% year over year.
This could mean that fewer farmers are buying due to economic uncertainty. At the same time, the data follows an upward trend that began mid-pandemic in 2022 as manufacturers began catching up on backorders. The climb seems to be slowing. Last February, used high-horsepower tractor inventory spiked 60% year over year. This year, it’s only up 6%.
Meanwhile, price tags for tractors with 100 hp and greater dipped slightly by about 4% year over year. High-horsepower machines fell a bit further.
Used-combine inventory is up slightly, softening prices. Sprayer inventory levels ticked down by 2.56% month over month, also weakening prices. Planter inventory decreased, with prices trending up.
Construction market improves
As for the market for construction equipment, trucks and trailers, buyer confidence grew in February as auction prices decreased. Given the demand, prices have leveled off.
“February was a big month for the construction market,” says Mitch Helman, sales manager at AuctionTime, about the report. “We had some strong construction results among late-model, low-hour yellow iron units on AuctionTime. This bodes well for auction prices.”
Scott Lubischer, a manager at Truck Paper, has noticed similar trends for used trucks and trailers. “Values have stabilized over the past few months, and recent auction results indicate that market confidence is growing,” he says.