North American farmers are pinching pennies for farm equipment as an unprofitable growing season approaches
Written by Ed White
REGINA, Saskatchewan, April 3 (Reuters) – Farm equipment dealers are wrapping up a bad season for farm shows in North America as farmers prepare for spring planting without new equipment.
Farmers haven’t stopped buying, but many have cut back on spending and avoided big-ticket items because of high equipment, fertilizer and fuel prices, as well as a global grain shortage that has depressed crop prices.
“They might not buy a million-dollar combine, but they will buy a $100,000 tool,” said Chad Jones of manufacturing company Degelman Industries, standing among his company’s rockpickers, harrows, rippers and other yellow-painted equipment at Canada’s Farm Show in March.
Farmers are still spending, but less than in previous years, according to sales data from the Association of Equipment Manufacturers, an organization that represents the industry’s biggest players in North America.
The group told Reuters that sales of big-ticket items such as tractors and combines fell between 30% and 40% in the US in March compared to a year ago.
Farm equipment sales have been bolstered by a squeeze on farmers’ finances boosted by US President Donald Trump’s wartime tariffs that have raised production costs for already expensive equipment such as tractors and combines. These items, known to farmers as “big iron,” are produced in large quantities of iron and often with imported parts.
The Trump administration is reportedly planning a 25% tariff on the value of imported finished goods containing steel and aluminum, rather than just 50% of the metal content of those goods. That will likely increase the value of those products. However, many goods made of steel and aluminum, including tractors and combines, will still face the 50% tariff that has been in place for almost a year.
In its latest quarterly earnings call, a John Deere executive said the company estimates prices will be $1.2 billion by 2026, and that not all of the 2025 tax costs have been passed on to farmers.
Last Friday, Trump asked manufacturers to lower prices to help farmers.
But for a frustrated industry, Trump’s tariffs are a problem. The easiest way to lower the cost of equipment would be to “dramatically reduce the prices that go to manufacturers, and the costs of retrieving that go to farmers,” said Kip Eideberg of the Association of Equipment Manufacturers.
Trade wars have hurt US crop exports, as China has been out of the US soybean export market for months, depressing North American crop prices and creating a glut of stocks.
“They were looking at very strong or non-existent profits next season, and this led to slow decisions about equipment replacement,” said Farm Credit Canada economist Leigh Anderson. Farmers have delayed planned purchases, holding on to aging machinery for a long time, he said.
Signs of that lack of interest can be seen at a farm show in Regina, with several farmers kicking the tires of tractors and other large equipment. Despite the more than 5,000 people who attended the exhibition, most of the exhibits were quiet.
“It’s fair to describe it as a shift in buying behavior from needs,” says AEM’s Eideberg. Fertilizer production costs and equipment are difficult to reduce once they have risen, which is why AEM hopes to see prices cut.
“That’s a quick relief that will make a big difference for farmers and producers,” Eideberg said.
(Reporting by Ed White, Editing by Emily Schmall and Aurora Ellis)
