When buying farm equipment, strategies that worked when money was flush isn’t as effective now. Today’s challenging agricultural economy calls for tightening overhead expenses by right-sizing equipment to acreage, consolidating machinery, shopping savvy and reducing maintenance costs by whatever means necessary.
And seeking out robust warranties is one smart way to do that, according to Steven Nelson, an Iowa sales representative with Steffes Auction.
“Maintenance costs have gone drastically up. The cost of repairs at most dealerships are $200-plus per hour,” Nelson said. “Keeping those maintenance costs down by being under warranty makes a farmer a little more money by putting a little money in his pocket. Warranties are helpful in today's market.”
And they’re not the only way to cut down costs. Matching equipment’s working capacity to the acreage it covers can reveal sale opportunities to free up liquidity, which is crucial when times are tough. Cash can’t help if it’s tied up in assets, so shuffling equipment around might be worth considering.
“Can you go down to one piece and use a mechanical front [tractor] to do multiple jobs to not have that extra spare tractor sitting around? It could free up a little cash,” Nelson suggested.
That might mean selling two smaller machines and buying a larger one for multiple uses. Or you can shave off rented ground to optimize equipment usage or rent more to maximize efficiency.
A buyer’s market
Times might be tough for many U.S. farmers, but it’s not all bad. Farmers who’ve delayed purchases until now to wait out the deficit might find themselves in a decent position: “It is a buyer’s market for newer machines. Costs have gone down drastically enough that the option is there,” Nelson said.
That advice is relative to yesterday’s costs, because well-maintained machines are still expensive due to the concept of a “rising tide floats all boats.” In this case, pressured by still-high tariffs and increased trade-driven manufacturing costs, increasingly costly new machines rolling off assembly lines are pushing up used prices.
“It’s a parallel line. As new equipment goes up, used equipment follows,” Nelson said.
But while parallel, that correlation isn’t exact. Nelson said 1- to 3-yer-old combines and tractors, valued between $500,000 and $700,000, have taken a “very marginal hit” compared to certain older machines, which have become more affordable. Likewise, late model, pre-emission equipment remains strong with no major price drops because farmers can repair equipment and avoid shop costs.
Shop around
It’s not just farm equipment that’s expensive these days. Land prices have likewise reached record heights. Real estate is a tangible asset that exponentially builds buying power. This creates a divide in buyer behavior, according to Nelson, who said landowners might not delay purchases because “they have the overhead and the equity to take care of costs.”
Farmer-renters, meanwhile, remain tentative because they are more vulnerable to market shifts. Even so, opportunities can be found for savvy businesspeople operating both small and large farms on owned or rented ground. It all starts in the farm office.
“Comparing auction prices versus dealerships right now definitely has a benefit,” Nelson said. “There’s a market that can be made by buying from a dealer and then turning around and selling in an auction. Generally, your ROI is a little bit better in that situation.”
It’s always a good idea to follow the return on investment. In today’s farm economy, that path might lead to alternative transactions like lease-to-own agreements, which can spread costs across longer time periods. They’re a little bit safer because if it doesn’t work out, just walk away.
But there’s an economic caveat worth noting: “The high interest right now tends to raise prices. So, it’s not always economical,” Nelson said. Those high interest rates are expected to slacken slightly throughout 2026, which could present an opportunity for well-positioned would-be-leasers.
And if nothing pencils out? Nelson offered this tried-and-true advice: Don’t do anything.
“If [farmers] have machinery that's working and can be utilized in their operation, yeah, I might continue to push forward,” he said.