Farm Equipment Prices Stay High Amid Rate Hikes
Machinery sales are slipping as Federal Reserve rate increases and sticky inflation keep financing costs elevated for farm buyers.
Updated on Nov. 7, 2026 in Agriculture
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U.S. sales of agricultural tractors fell 16.4% and combine sales fell 10.9% in September from a year earlier, as the Federal Reserve raised interest rates that month. Equipment prices are not expected to get cheaper in the foreseeable future.
Why it matters
Sticky inflation has pushed the Federal Reserve toward a hawkish stance, raising the cost of financing farm machinery for buyers across the country. Geopolitical tensions, tariffs, AI infrastructure spending, and government spending have contributed to rising inflation and long-term yields.
Point-of-sale equipment financing fell 20% in 2025, and U.S. tractor and combine sales dropped 16.4% and 10.9% in September from a year earlier. Used tractors with 100 hp or more gained nearly 5% in value over the same period, while the duration of the financing slowdown remains unclear.
The players
Federal Reserve
The central bank of the United States, which sets benchmark interest rates and has taken a hawkish stance to combat sticky inflation.
Greg Roberg
A dealer or industry observer quoted in the story who expects another Federal Reserve rate increase before Christmas.
The details
Machinery manufacturers have slashed production to meet decreased demand, which has shrunk newer on-lot inventory at dealerships. Rising commodity prices that have stabilized in recent months are driving farm machinery sales upward, even as diesel prices have risen sharply and long-term yields have reached multi-decade highs.
Timeline
2025: Point-of-sale equipment financing fell 20%.
September 2026: The Federal Reserve raised interest rates, and tractor and combine sales declined.
October 2026: The Federal Reserve took no rate action at its meeting.
Before Christmas 2026: Greg Roberg expects another Federal Reserve rate increase.
End of 2026 into 2027: Dealers expect growing optimism.
Market Landscape
The slowdown follows the Federal Reserve's September rate increase, which has tightened financing for farm equipment purchases. Dealers and manufacturers are adjusting to the drop in demand by reducing production and holding smaller new inventories.
Farm operations face higher costs to finance new tractors and combines, while used equipment values are holding firm. Buyers weighing a purchase should consider that financing rates are likely to stay elevated through the near term.
The takeaway
Equipment buyers should plan for elevated financing costs and consider used machinery, whose values have risen, while monitoring Federal Reserve decisions that will shape borrowing costs into 2027.
What happens next
Another Federal Reserve rate increase is expected before Christmas, and dealers anticipate improved sentiment as the year closes and into 2027.
Further reading
For more on the forces shaping farm budgets, explore Agriculture coverage.
Source note: This article includes information reported by Farm Progress.
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