The sluggish farm economy has been slow for a while, making it tempting to delay that combine purchase for a few more months to see if things turn a positive corner. But what if today’s ag machinery market is as good as it will get for the foreseeable future?
Sticky inflation has turned the Federal Reserve hawkish. September saw the year’s first interest rate hike. And while the Fed forewent action at its October meeting, Greg Roberg, vice president of sales at AgDirect, expects another before Christmas.
“I don’t see rates getting any better. There’s a better chance they’ll go up,” he said. “Right now, the futures market appears to be leaning toward another Fed rate increase before the end of the year.”
Rising inflation isn’t attributable to a single factor, although skyrocketing diesel prices have accelerated the trend. Geopolitical tensions, war, tariffs, increased AI infrastructure spending and rampant government spending have driven long-term yields to multi-decade highs.
Out in the fields, farmers aren’t buying. Point-of-sale equipment financing plummeted 20% in 2025. The outlook is similarly tracking this year because stressors aren’t abating. U.S. sales of agricultural tractors declined 16.4% in September from last year, while combine sales fell 10.9%, according to the Association of Equipment Manufacturers.
“We have the Russia-Ukraine war, which has rattled the energy markets, then the war with Iran and the on-again-off-again Strait of Hormuz closure,” Roberg said. “High oil prices have created additional stress on producers.
“All of us are seeing higher prices at the gas pump, and anything that has petroleum products is likely higher than it was six months ago, certainly a year ago. Inflation has crept back up; it was heading down.”
Reduced inventory
Facing an uncertain future, machinery manufacturers have slashed production to meet decreased demand. That means newer on-lot machinery inventory is dwindling. Roberg recommends buying while it’s still available.
“Dealers have a very good assortment of late-model equipment,” he said. “The best advice I can give producers is: Find what you’re looking for, talk to your tax accountant, and make a really well-informed decision. Producers that need equipment should be looking at what is available now that might fit their operation and their budget.”
While buying remains down, farmers across the United States are beginning to heed this advice. Roberg said farm machinery sales are picking up. He attributes this mostly to rising commodity prices, which have stabilized over the last several months.
Data from Sandhills Global contextualizes his commentary. Its latest market report documents rising auction prices as competition heats up. Values for used tractors with 100 hp or more are up nearly 5% over this time last year.
“The farm equipment auction market has seen a jump in activity,” said Ryan Dolezal, manager of TractorHouse. “We view this as moderate progress in the right direction, tempered by increases in fuel prices and other variables, but dealers are becoming more optimistic for the end of the year and into 2027.”
That’s because, despite friction in the macro environment, price profitability tends to influence equipment purchasing the most. In short, farmers buy when they can.
“Cash flow seems to be the biggest driver,” Roberg said. “When the price of corn and soybeans and some other commodity prices are profitable, that drives sales as much as anything — even more than interest rates.”
This short-term pause in interest rate hikes presents a buying opportunity for those sitting on dry cash powder. Roberg recommends shopping now, because it might be the right time to pull the trigger.