CALGARY, ALBERTA (RFD-TV) — U.S. farm equipment sales continued to decline through September as tight farm margins, higher borrowing costs and uncertainty over commodity prices weighed on machinery purchases.
According to the Association of Equipment Manufacturers (AEM), U.S. year-to-date sales through September were down 23.4 percent for four-wheel-drive tractors and 9.4 percent for combines compared with the same period in 2025. Canadian equipment sales also remained below year-ago levels.
Shaun Haney, host of Real Ag Radio, joined us on Tuesday’s Market Day Report to explain how the weakness reflects the financial pressure facing farmers and the difficult decisions they are making about equipment investments.
“I think this is, in some ways, the weakness that we saw according to AEM for September and really the year-to-date numbers,” Haney said. “I don’t think it was a big surprise.”
Tight Margins Squeeze Equipment Demand
In his interview with RFD-TV, Haney said some expected commodity prices to improve over the summer, giving farmers more cash to put toward equipment purchases. However, farm profitability remains a concern.
“We’ve really got kind of a capital squeeze here with double-digit drops in both big horsepower sales and the tight margins,” he said.
Haney also pointed to borrowing costs and input expenses as factors limiting cash flow. With machinery purchases requiring significant capital, farmers must weigh their financial position before committing to new equipment.
For many operations, that means deciding whether to keep existing machinery running or replace it.
“A lot of farmers [are] going through that do-I-repair-versus-replace kind of scenario,” Haney said.
Depreciation in the used equipment market may also be discouraging some producers from buying new machinery, he said.
Equipment Dealers Face Their Own Challenges
The slowdown is affecting equipment dealers as well as farmers.
Haney said dealers are caught between manufacturers and customers as the industry determines who will carry the cost of unsold inventory.
“Is it going to be OEMs? Is it going to be the dealer or is the farmer going to make the purchase at the end of the day?” Haney said.
He described dealers as being caught in the middle as farmers delay purchases and manufacturers work through inventory decisions.
Canadian Sales Face Additional Pressure
Canadian equipment sales have also struggled. AEM’s year-to-date figures through September showed two-wheel-drive tractor sales down 8.9 percent, four-wheel-drive tractor sales down 25.3 percent and combine sales down 10 percent compared with the same period in 2025.
Haney said Canadian producers face many of the same profitability challenges as their U.S. counterparts, with exchange rates and trade tensions adding uncertainty.
“The Canadian dollar has not exactly been exceptional relative to the U.S. dollar,” Haney said, noting that the currency had been around 70 to 71 U.S. cents.
He also pointed to tariff issues affecting equipment and parts, including combine headers.
Even when farmers have a profitable crop, Haney said their ability to invest in machinery depends partly on the condition of their balance sheets after several challenging years.
“It’s really at the farm level. It’s really the same situation where profitability really rules the day,” he said.
What Could Turn Sales Around?
Haney identified three factors that could help improve equipment demand: interest rates, stronger commodity prices and greater policy certainty.
He said the outlook for interest rates remains a concern, while commodity rallies would need to improve potential profit margins for growers.
Policy certainty, particularly around trade, is another major factor.
“The one that has the highest probability, or maybe I’m the most hopeful for, the most confident, is some policy certainty, especially around things like the trade issues,” Haney said.
He also pointed to the need for greater certainty around the farm bill as a potential source of confidence for U.S. producers.
For now, Haney said challenges remain across the machinery sector, and the remainder of 2026 will be important to watch.
