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Higher input costs, tighter credit conditions, and ongoing commodity price volatility have reduced working capital, leading many producers to delay or scale back equipment purchases. U.S. farm equipment markets remain under pressure in 2026. 

New equipment sales have been hit the hardest. In 2025, more than 65% of equipment dealers reported revenue declines for new equipment. Conditions have continued to soften in 2026, with U.S. new farm tractor sales down 21.6% year over year in May, and every month this year posting lower sales compared to 2025, according to the Association of Equipment Manufactures. In June, Creighton University’s Farm Equipment Sales Index reported its 34th straight month of contraction. 

While both new and used equipment markets have softened, the used market has held up somewhat better. Approximately 26% of dealers expected revenue growth in used equipment, compared to only 18% for new equipment. Strong auction activity, driven largely in part by retirement sales, has supported used equipment demand, particularly for well-maintained older machinery. 

Even with softer demand, farm equipment prices have remained elevated. Prior to 2021, machinery prices were relatively stable, but supply chain shortages of steel and microchips during the COVID-19 pandemic drove a sharp increase in costs. In 2024, ag machinery prices continued to rise, but at a slower pace. Despite this easing, USDA’s May 2026 index of prices paid by farmers for machinery reached a record 172.5, up 1.3% year over year, underscoring that inflationary pressures remain in place. 

Index of Prices Paid by Farmers for Machinery

Source: USDA NASS. 

Equipment decisions are becoming more strategic. For producers, disciplined cash flow management is increasingly critical, with careful evaluation of whether to repair existing equipment, purchase used or invest in new. For dealers, understanding farm-level profitability drivers remains essential, as equipment demand continues to lag broader shifts in the ag economy.

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