Farm equipment sales are projected to decline next year according to a Farm Credit Canada report released today.
“Farmers are looking for cost saving measures including delaying purchases and planning to further reduce equipment costs,” said FCC senior economist Leigh Anderson in a news release accompanying the report.
“As demand slows and prices adjust, there may be opportunities for producers who are looking to invest in new farm equipment.”
The year began with a surge in demand for machinery, particularly combines and four-wheel-drive (4WD) tractors, Anderson wrote. Slowing sales in the U.S. allowed manufacturers to send pre-orders to Canada earlier.
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However, sales are forecast to decline for the remainder of the year and into the next. New equipment sales are expected to be soft as farmers face low commodity prices, high equipment prices and lower profits, though the decline in 2025 is expected to be less severe than in 2024. Sales of 4WD tractors are projected to stay above the five-year average, Anderson said.
Combine sales are expected to decline nearly seven per cent in 2025 compared to the five-year average. Tractors between 40 and 100 horsepower are expected to decline nearly 21 per cent, sales of those below 40 horsepower are expected to drop nearly 29 per cent, and those above 100 horsepower a bit more than six per cent, according to FCC calculations.
Early arrival of new equipment has led to more trade-ins. Used equipment sales are down about 20 per cent compared to the same time last year.
American farmers have also struggled with slumping farm income, which has led U.S. machinery manufacturers to cut production. Deere & Co said today it expected net sales to fall about 10 to 15 per cent across all machinery segments. CNH Industrial and AGCO have also trimmed profit expectations.
FCC predicts that as sales slow, machinery inventory will build up and prices will continue to adjust throughout next year. Lowering interest rates may also ease financial pressure and make it easier for farmers to buy equipment.
While crop prices are expected to remain low next year, cattle prices have been strong. This could encourage cattle producers to upgrade equipment, however many of those operations are still recovering from drought years and high feed costs.
