Farm equipment demand still weak
March agricultural equipment sales showed continued weakness across farm machinery categories, and farmers report mounting financial pressure aggravated by tariffs and geopolitical shocks. That combination raises collateral and cash‑flow risk for equipment lenders who concentrate in ag segments. (wbiw.com) (pbs.org)
U.S. farmers bought fewer tractors and combines in March, extending a slump that now runs across nearly every major equipment category. (newsroom.aem.org) The Association of Equipment Manufacturers said total U.S. farm tractor sales fell 9.1% from March 2025, while self-propelled combine sales dropped 25.3%. Sales of 100-horsepower-and-above two-wheel-drive tractors fell 24.4%, and four-wheel-drive tractors fell 25.2%. (newsroom.aem.org) The weakness is not limited to one month. Through the first three months of 2026, total U.S. farm tractor sales were down 8.8% from a year earlier, and combine sales were down 3.5%, according to the same April 10 report. (financialcontent.com) Farm equipment demand usually tracks farm cash flow, because tractors and combines are often financed over several years and used as collateral for the loan. When sales of high-horsepower machines fall first, it often signals that larger row-crop farms are delaying big-ticket purchases. (ers.usda.gov) (newsroom.aem.org) That pullback is landing in a farm economy already under strain. The United States Department of Agriculture forecast 2026 net farm income at $153.4 billion, down 0.7% from 2025 in nominal terms and down 2.6% after inflation. (ers.usda.gov) Farmers in the soybean belt say costs are moving the wrong way at the wrong time. In Nebraska, Doug Bartek, a fifth-generation farmer who works 2,000 acres and chairs the Nebraska Soybean Association, told the Associated Press that fuel, fertilizer, parts and equipment costs were rising while soybean prices stayed low. (pbs.org) The same report said tariffs from the Trump administration’s trade fight with China and shipping disruptions tied to the Iran war pushed fertilizer prices higher this spring. A ceasefire announced April 7 raised hopes that traffic through the Strait of Hormuz would improve, but farmers interviewed by the Associated Press said the outlook was still uncertain. (pbs.org) Bankers are seeing the pressure show up in credit. The Chicago Federal Reserve said 32% of surveyed lenders reported lower repayment rates on non-real-estate farm loans in the fourth quarter of 2025 than a year earlier, while only 1% reported higher rates. (chicagofed.org) The Kansas City Federal Reserve said farm loan delinquency rates increased slightly at the end of 2025, with just over 1% of agricultural loan balances more than 30 days past due. It also said farm lending activity kept growing into the first quarter of 2026, led by operating and livestock loans. (kansascityfed.org 1) (kansascityfed.org 2) Collateral has held up better than income so far. The Chicago Federal Reserve said farmland values in its district rose during the fourth quarter of 2025 even as credit conditions deteriorated, which has helped cushion lenders while working-capital stress builds. (chicagofed.org) For equipment lenders concentrated in agriculture, that mix is the core risk in 2026: softer machinery demand, weaker repayment trends and farmers stretching operating credit to get through planting season. March’s sales report did not show a turn yet. (newsroom.aem.org) (kansascityfed.org)
