Wedoany.com Report on Mar 6th, According to an analysis by Gerald Mashange from the University of Illinois on farmdoc daily, demand for U.S. agricultural machinery continues to weaken. Declining crop revenue, high borrowing costs, and tariff pressures collectively slow down equipment purchases and reshape manufacturer strategies, reflecting that tightening farm profit margins directly impact capital expenditure decisions.
Mashange reports that equipment sales have been in a state of contraction for over two years. The Creighton University Agricultural Equipment Sales Index has remained below the growth-neutral level since October 2023, dropping to 16.7 by February 2026. National data shows that tractor sales fell to 195,857 units in 2025, a nearly 10% decline from the previous year, while combine harvester sales dropped significantly to 3,579 units, a decrease of over 35%. Dealers also report a widespread decline in demand for both new and used equipment.
Economists point out that while tractor sales grew by nearly 18% and combine harvester sales by 5% in 2020, sales saw a significant drop in 2023. Despite the sales decline, prices remain high, and researchers state that tariffs are currently the most concerning issue. Implications at the farm level show that weak crop profit margins and tariff uncertainty are delaying machinery purchases, signaling a slowdown in capital investment within the U.S. agricultural sector.
Manufacturers are responding by cutting production and reducing inventory. Agricultural machinery inventory decreased from approximately $7.23 billion at the end of 2022 to $5.72 billion in December 2025, although it has seen a slight uptick in recent months. As farmers postpone purchases and extend equipment lifespans, used equipment inventory and prices generally show a downward trend.
Trade policy remains a major source of uncertainty. Mashange notes that tariffs implemented in 2025 significantly increased manufacturers' costs, with Deere & Company bearing about $600 million in tariff expenses and anticipating higher future costs. Although a recent U.S. Supreme Court ruling has challenged parts of these tariffs, new trade actions have once again introduced uncertainty to the equipment market.
At the Commodity Classic, Curt Blades, Senior Vice President of the Association of Equipment Manufacturers (AEM), told RFD News: "Combine harvester sales this year are actually down nearly 40%, you know, these numbers are somewhat unsettling. This continues the trend we've seen for some time, reflecting overall weakness in the agricultural market. Farmers don't necessarily need to invest in capital equipment, and when faced with uncertainty, they can keep their equipment running for another year. We've been seeing this in the market over the past few months."
Blades stated that there are some bright spots in their latest assessment, with the used equipment market performing strongly over the past year, offering more options for cash-strapped farmers. The downward trend in agricultural machinery sales highlights the ongoing impact of weak farm income and tariff pressures on U.S. agricultural capital expenditure.
