U.S. Ag Tractor Sales Show Early 2025 Softness

U.S. sales of agricultural tractors and combines dropped significantly in January 2025, according to the latest Association of Equipment Manufacturers (AEM) data. The report shows that tractor sales fell by 15.8 percent and combine sales plunged by 78.9 percent compared to the previous year. The trend highlights ongoing market challenges amid economic uncertainty, tariffs and high interest rates. From the press release:

“As we enter 2025, we’re seeing a continuation of slow sales saw throughout 2024.” said AEM Senior Vice President Curt Blades. “The Ag industry continues to face uncertainties including global trade concerns, tariffs, and the lack of assurance that a farm bill provides. These uncertainties are reflected in the softness of the ag equipment market.” 

January 2025 in Focus

In January 2025, the AEM report recorded a steep decline in sales. U.S. Ag tractor sales dropped 15.8 percent year-over-year. Self-propelled combines saw a drastic 78.9 percent decline. These numbers reveal a market that continues to struggle under global trade concerns and fiscal uncertainties. The report provides a detailed breakdown of tractor sales by horsepower. Notably, tractors under 40 hp saw a decline of 11.3 percent. In January, 5,308 units in this category sold versus 5,987 units a year ago. The performance of this segment contrasts with higher horsepower tractors, which experienced steeper declines. Overall, these figures indicate that while the market softens, compact tractors may hold their ground relatively better.

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Trends from Late 2024 to Early 2025

The recent decline in January follows similar trends seen in November and December 2024. In November 2024, U.S. tractor sales dropped by 14.5 percent compared to the previous year. December 2024 data revealed an 11.3 percent decline in ag tractor sales, with combine sales falling by 26.4 percent. Each month shows a persistent softness that now extends into 2025.

This trend suggests that the ag equipment market has experienced a prolonged slowdown. High interest rates and uncertain global trade conditions continue to weigh on buyers. Farmers and contractors appear to delay major purchases amid lingering economic doubts. Nevertheless, the relative stability of the sub-40 hp segment offers a glimmer of hope for compact equipment enthusiasts.

Market Drivers and Economic Uncertainty

Multiple factors contribute to the declining sales figures. Global trade tensions and tariffs create a challenging buying environment. The absence of a comprehensive farm bill further deepens uncertainty among buyers. These economic pressures result in cautious spending and delayed investments in new equipment. High interest rates compound the issue. They increase borrowing costs and deter financing new purchases. This environment forces operators to carefully evaluate their equipment needs and defer upgrades or replacements. The cumulative effect of these factors has led to the observed declines in sales figures.

2025 Has Already Been a Busy Year for Compact Tractor Launches

Regardless of these market numbers, the first two months of 2025 have set the stage for an eventful year. Major brands like Kubota, Massey Ferguson, New Holland and Case IH have already launched new utility tractor lines (review them at those links). These introductions promise fresh innovations and improved performance. They aim to address the demands of modern operators and counterbalance current market softness. The launch of new models signals that manufacturers remain confident in the long-term outlook. While immediate sales figures are down, the industry continues to invest in product innovation.

Competitive Landscape Means Shifting Preferences

The drop in sales during January 2025 carries significant implications. A shift in buying patterns may emerge. Operators might delay larger investments while opting for smaller, more versatile machines. This behavior favors the sub-40 hp segment, which offers practical benefits and lower upfront costs. Additionally, the focus on compact utility tractors aligns with current trends in off-highway construction and landscape maintenance. These sectors demand nimble, adaptable equipment that can handle diverse tasks.

Keith Gribbins is publisher of Compact Equipment.