U.S.-China trade deal brightens farmers’ outlook

Farmer sentiment improved following the recent U.S.-China trade deal and optimism surrounding federal subsidies, potentially yielding a slight boost in farm equipment sales. 

Purdue University’s Ag Economy Barometer rose 10 points in November to 139, its highest reading since June. The report, released Dec. 2, comprised responses from roughly 400 farmers surveyed from Nov. 10 to Nov. 14. 

The Index of Future Expectation jumped 15 points to 144, while the Index of Current Conditions dipped two points to 128. The Farm Financial Performance increased 14 points to 92, with 24% of farmers expecting better financial performance this year, up from 16% in October. 

The brightened outlook was attributed to a sharp rise in crop prices and the October trade agreement with China, which reduced or suspended certain tariffs, including retaliatory tariffs on U.S. agricultural products.  

The trade deal was a “game changer” and has already caused a “sizable movement in corn and soybean prices,” Michael Langemeier, director at the Center for Commercial Agriculture at Purdue, told Equipment Finance News.  

“2025 is still a fairly tough net return year, but this certainly helped considerably,” he said.  

Low commodity prices have been a major driver of the prolonged farm machinery sales slump.  

Equipment dealer Titan Machinery, for example, saw agriculture-segment revenue slide 12.7% year over year in its fiscal third quarter. Demand will likely remain muted “without a significant improvement in commodity prices or substantial additional government support,” Chief Executive Bryan Knutson said during the company’s Nov. 25 earnings call.  

Farm payments on horizon 

A short-term “bridge payment” for farmers will begin to roll out next week while the U.S. Department of Agriculture finalizes longer-term relief packages, Secretary of Agriculture Brooke Rollins announced on Dec. 2. 

The USDA has not provided details of the planned relief packages but vowed that President Donald Trump is “supporting farmers through unprecedented international market access, lowered taxes and improvements to the farm safety net in the One Big Beautiful Bill,” a spokesperson told EFN.  

“Currently, the farm economy is in a difficult situation, and President Trump is utilizing all the tools available to ensure farmers have what they need to continue their farming operations,” the spokesperson said.  

The federal government is projected to provide more than $40 billion in farm aid in 2025, the second-highest amount since 1933, according to USDA data. 

What it means for equipment  

If farmers receive payments through the Market Facilitation Program, a USDA initiative to offset losses from trade disruptions, 58% said they will primarily use the money to pay down debt, including equipment loans, according to the Purdue survey. Eleven percent said they would buy machinery.  

Further, the Farm Capital Investment Index fell six points in November to 56, with 16% of respondents saying now is a good time to make large investments.  

While most crop producers, especially small farms, are not positioned to purchase equipment soon, the pool of potential buyers is growing amid recent tailwinds and new tax breaks under the One Big Beautiful Bill, Purdue’s Langemeier said.  

“I think there’s a certain group that’s going to be able to take advantage of the very high Section 179 expense deduction or the 100% bonus depreciation,” he said.  

More buyers could emerge in 2026 if they pay off their debt, although they may struggle to liquidate assets due to equipment dealers’ unwillingness to accept trade-ins, he said.  

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