01 September 2026, Washington: US farm machinery demand remained sharply constrained heading into the last full month of summer, with fresh data from Creighton University’s Rural Mainstreet Index (RMI) and the Association of Equipment Manufacturers (AEM) both pointing to a market still working through a prolonged downturn. The farm equipment sales component of the RMI, based on a monthly survey of rural bank CEOs across a ten-state, agriculture-dependent region, fell to 22.2 in August from 27.8 in July, marking its 36th consecutive month below the growth-neutral threshold of 50.
The national picture from AEM tells a similar story using actual sales figures. Retail sales of agricultural tractors in the United States totaled 15,985 units in July, down 10.9 percent from the same month a year earlier, with year-to-date sales running 13.1 percent behind 2025’s pace. The steepest declines were concentrated in large four-wheel-drive tractors, where July sales fell 38.7 percent year over year and year-to-date volume was down 27 percent. Two-wheel-drive tractors with at least 100 horsepower were down 15.5 percent for the year, while self-propelled combine sales fell 5.3 percent in July and 10.2 percent year to date, a somewhat smaller decline than tractors.
Curt Blades, AEM’s senior vice president, said the July figures reflect continued softness as farmers and manufacturers work through what he called ongoing economic uncertainty. Weak grain prices, elevated borrowing costs, and equipment prices that have not fallen alongside demand are the factors most frequently cited by economists tracking the sector.
That last point, machinery pricing, is notable because it has not moved in step with falling unit sales. USDA’s National Agricultural Statistics Service reported its Machinery Prices Paid index at 173.9 in June, up 2.1 percent from a year earlier. Within that, the tractor price index rose to 145.6 from 142.9, and the self-propelled machinery index rose to 173.5 from 171.0. University of Illinois agricultural economist Gerald Mashange noted in a farmdocdaily analysis published this week that machinery prices have climbed roughly 74 percent since 2011 on a cumulative basis, with tractor prices up about 46 percent over the same period, a run-up driven originally by pandemic-era supply chain disruption and elevated steel costs that has only partially unwound as demand has cooled.
The net effect is a market where farmers face expensive replacement equipment at the same time that weaker farm income is reducing both their capacity and willingness to commit to major capital purchases. Dealers, meanwhile, continue to carry elevated inventory relative to current retail demand, even as manufacturers have throttled back production to try to bring supply back in line. Mashange’s analysis concluded that a meaningful recovery in machinery demand will likely require improved farm profitability and renewed confidence before producers return to the market in volume.
Not every signal is negative. Some manufacturers, including AGCO, have pointed to an aging national fleet and rising interest in retrofitting older machines with precision agriculture components as reasons to expect sales to stabilize later in 2026, even if new unit sales stay muted. For now, though, the data through July and August points to a machinery market still firmly in contraction.
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