As Boom Times Fade, U.S. Farm Equipment Piles Up

Falling crop prices are leaving agriculture equipment sellers with an excess of unsold tractors and combines.

Manufacturers Deere and CNH Industrial struggled to keep up with the strong demand for tractors in 2022 when farm income hit a record high and pandemic assistance payments gave farmers extra money to upgrade their fleets. I Photo: Calle Eklund Wikimedia Commons

To cope with the surplus, dealers are discounting machines, suspending new orders, and even auctioning off equipment at reduced prices, Bianca Flowers, Renee Hickman, and Heather Schlitz reported for Reuters.

The slower equipment sales are a knock-on effect of corn and soy prices dropping to more than three-year lows as US farm income plummets and equipment makers and dealers are forced to pivot quickly after a period of booming business.

Reuters interviewed 10 equipment dealers, mostly in the Midwest, as well as farmers and analysts, who said low crop prices combined with persistently high interest rates are deterring farmers from purchasing machinery.

As farmers make fewer purchases, inventories of equipment are swelling, cutting into profits for dealers and big manufacturers alike.

Manufacturers Deere and CNH Industrial struggled to keep up with the strong demand for tractors in 2022 when farm income hit a record high and pandemic assistance payments gave farmers extra money to upgrade their fleets.

Now both expect slower sales to hit their bottom line this year. Josh Gruett, dealer principal at Waupun Equipment in Waupun, Wisconsin, which sells farm, construction, and other equipment, said his inventory has risen by 30% to 35% since the end of 2023.

In April, inventory levels of high-horsepower tractors (300 and above) in the US surged by almost 107% year-over-year, with combined inventory experiencing a 17.63% increase, according to Sandhills Global, a market research firm specializing in tracking used inventory for industrial manufacturers.