Weaker demand for large farm equipment to pressure sales and prices in 2025: FCC report

Regina, Saskatchewan, November 21, 2024 – After a strong start to the year for large equipment sales, a slowdown is anticipated in the farm equipment market. With falling commodity prices, high operating costs and lower profits, farms are placing a greater emphasis on their price per acre equipment costs according to Farm Credit Canada’s (FCC) 2025 outlook for the Canadian farm equipment market.

“Farmers are looking for cost saving measures including delaying purchases and planning to further reduce equipment costs,” said Leigh Anderson, FCC senior economist. “But as demand slows and prices adjust, there may be opportunities for producers who are looking to invest in new farm equipment.”

The year began with a surge in demand for large farm equipment, particularly combines and 4WD tractors. New combine sales in the first half of 2024 saw a five-year high, and 4WD tractor sales trailed only slightly behind 2021 sales. A slowdown in sales in the United States allowed manufacturers to send more pre-orders to Canada earlier. Usually, the Canadian combine market sees the most sales in the second half of the year.

This burst of activity is not expected to last through the remainder of the year and into 2025. However, the decline in new farm equipment sales is expected to be less severe than in 2024, and sales of 4WD tractors should stay above the five-year average. 

The early arrival of new equipment has led to an increase in trade-ins, injecting a considerable volume of used equipment into the market, particularly used combines. It’s estimated total used combine sales have dropped by 18 per cent compared to the same period last year. Smaller used horsepower tractor sales are down 40 per cent, and sales of used seeding and planting equipment have declined by 23 per cent year over year. Lower sales of used seeding and planting equipment mark a slowdown compared to the previous year.