US Farm Equipment Sales Plummet, Signaling Sector Downturn
Sales of self-propelled combines collapsed by nearly 50% in December as lower farm income and high interest rates curb machinery demand.
A steep decline in U.S. sales of tractors and combines in December points to a deepening downturn for the agricultural machinery sector, as farmers pull back sharply on capital expenditures.
According to a report released by the Association of Equipment Manufacturers (AEM), sales of self-propelled combines—massive machines critical for harvesting grains—plunged 49.7% compared to the same month last year. The data, published by GlobeNewswire, also showed significant year-over-year drops for large four-wheel-drive tractors (-27.3%) and smaller two-wheel-drive models (-26.3%), signaling broad-based weakness across the industry.
This slowdown hits the sector's titans, including Moline, Illinois-based Deere & Company (NYSE: DE) and CNH Industrial (NYSE: CNH), the parent company of Case IH and New Holland Agriculture. Together, these manufacturers dominate the North American market for high-horsepower farm equipment. The cooling demand reflects a challenging economic environment for their core customers, who are contending with a dual squeeze from lower crop prices and persistently high borrowing costs.
While macroeconomic data from late 2025 showed a projected rise in aggregate U.S. net farm income, that figure was largely inflated by government payments. The reality for many crop producers is far grimmer, with median farm income actually projected to be negative for the year. Falling prices for key commodities like corn and soybeans have eroded profitability, forcing farmers to postpone major investments.
"The heart of the market is feeling the pressure," noted one industry analyst. "With less cash on hand and financing costs for a new combine or tractor remaining elevated, many operators are choosing to repair their existing equipment rather than replace it."
This trend is exacerbated by an oversupply of machinery on dealer lots. A period of strong commodity prices and resolved supply chain issues in 2022 and 2023 led to a surge in equipment purchases. That wave of buying has left the market saturated, and dealers are now facing packed inventories and offering discounts to move stock.
The AEM's report serves as a key barometer for the health of the agricultural economy. The sharp pullback in equipment investment suggests a cautious, if not pessimistic, outlook from farmers regarding their financial prospects heading into the new planting season. For manufacturers like Deere and CNH, the data confirms expectations of a market normalization, or correction, after several years of robust growth, presenting a significant headwind for revenue and earnings in the coming year.