Weighed down by geopolitical tensions, new equipment sales remain low, while original manufacturers continue to cut back output to meet slackened demand. Bottom line is, well the bottom line: Most farmers have good reason to stick to window-shopping.
Even with $44.3 billion in direct government payments — nearly $14 billion more than last year — net farm income is expected to fall by $1.2 billion, according to USDA’s Economic Research Service.
“The June data reflects a market that is still navigating significant economic headwinds,” said Curt Blades, senior vice president at the Association of Equipment Dealers. Referencing the organization’s latest industry report, Blades noted an 18% drop in tractor sales and a slight 3.9% increase in combine sales.
“Although tractor sales remain below last year’s levels, the increase in combine sales is a welcome development and demonstrates that farmers continue to invest where it makes the most sense for their operations,” he said. “Greater certainty around market conditions and long-term farm policy remains critical to supporting confidence across rural America.”
However, this jump in combine sales is a blip in the grand scheme. Plenty of new and newer inventory remains parked on dealer lots. Instead, farmers are increasingly heading to auctions. With the supply of used equipment limited, auction houses report less inventory, which leads to increased prices.
High-horsepower tractor inventory is down more than 16% over 2025, having steadily declined for over a year. And fewer sprayers, combines and compact tractors are available, according to Sandhills Global’s latest industry report.
Tied to stressors
Today’s equipment trends directly correlate with geopolitical events. Ongoing armed conflicts have bottlenecked oil supply lines. This also isn’t good news for inflation or input expenses. Meanwhile, farm income is slumping, while tariffs on steel and ag machinery components exert pressure on prices. But while stressors abound, some bright spots can be found:
- Tariffs are down. The Trump administration recently reduced its yearlong import tariffs on finished agricultural equipment from 25% to 15% for at least a year, providing much-needed relief and market predictability for farmers, dealers and manufacturers.
- Freight is moving. “Freight continues to be strong, and fuel prices are letting up, leaving dealers hopeful that prices will go down. Aggressively priced units are currently moving, and more dealers are looking to buy,” said Scott Lubischer, Truck Paper sales manager, about the commercial trucking market conditions in June.
At least in the short and medium term, pessimism dominates Wall Street’s financial projections for ag machinery revenue. The future is uncertain. Fuel costs could spike, wiping out Lubischer’s careful optimism.
With purchasing power down, the largest ag machinery brands are already operating with tight margins. The industry rises and falls with farm income — and for now, it’s trending down. Farmers bear the brunt of geopolitical tussles, and elevated interest rates are expected to remain so.
Solid floor under prices
There’s not much farmers can do besides keep on chugging. This elevated price floor seems to have solidified for both new and used equipment. It probably won’t fall anytime soon, meaning now is as good a time as ever to invest in a necessary machine if it pencils out — emphasis on that last part. Mitigating risk should be top of mind, as always.
This oft-quoted adage rings true more than ever in this tough economy: If it ain’t broke, don’t fix it — unless the added costs can be offset by creating savings or by rightsizing equipment to acreage. That might equally mean:
- rolling Dad’s machine through yet another season
- modernizing old machinery with precision tech upgrades
- buying two older machines instead of a single new one
- leasing instead of purchasing
- buying new if it pays for itself with cost savings
- fix it yourself
North Carolina farmer Jeff Wilson has built a stable agribusiness around that last bullet point. He and his sons repair just about everything themselves.
“We use a lot of used equipment. As long as it does the job, I don’t care how old it is if it doesn’t cost us money to own it,” he said.
And if they don’t have the machine they need, perhaps a neighbor does.
As always, the right approach to fleet management depends entirely on the farmer and their operation. There’s no single right way to run an agribusiness.