URBANA, IL – U.S. farm machinery demand continues weakening as lower crop incomes, high borrowing costs, and tariff pressures combine to slow equipment purchases and reshape manufacturer strategies, according to analysis by Gerald Mashange of the University of Illinois published by farmdoc daily. The downturn reflects tightening farm margins that are directly influencing capital spending decisions across agriculture.
Mashange reports equipment sales have remained in contraction territory for more than two years. The Creighton University Farm Equipment Sales Index has stayed below growth-neutral levels since October 2023, falling to 16.7 in February 2026. National data show tractor sales declined to 195,857 units in 2025, down nearly 10 percent from the previous year, while combine sales dropped sharply to 3,579 units — a decline of more than 35 percent. Dealers also report widespread declines in demand for both new and used equipment.
Manufacturers are responding by cutting production and reducing inventories. Farm machinery inventories fell from roughly $7.23 billion in late 2022 to $5.72 billion by December 2025, though recent months show slight rebuilding. Used equipment inventories and prices have generally trended lower as farmers delay purchases and extend equipment life cycles.
Trade policy remains a major uncertainty. Mashange notes tariffs imposed in 2025 significantly increased costs for manufacturers, with Deere & Co. absorbing about $600 million in tariff expenses and projecting even higher costs ahead. Although a recent U.S. Supreme Court ruling challenged portions of those tariffs, new trade actions have renewed uncertainty for equipment markets.
Farm-Level Takeaway: Weak crop margins and tariff uncertainty are delaying machinery purchases and signaling slower capital investment across U.S. agriculture.
(Read more here: https://farmdocdaily.illinois.edu/2026/02/the-u-s-farm-machinery-equipment-market-sales-inventories-and-tariff-headwinds.html)