Farmers are still delaying equipment purchases as US President Donald Trump’s tariffs cloud demand for crops and risk further extending a years-long slump in the sector.
Top tractor makers CNH Industrial NV and AGCO Corp. each reported lower first-quarter sales Thursday, and pointed to the potential of reduced demand for farmers, which would give them less to spend on machines to plant, harvest and treat their fields.
Still, AGCO shares jumped as much as 13% Thursday, while CNH rose as much as 8.7%. Shares for each company have been lagging those of Deere & Co., the industry leader. Deere, which reports results later in May, gained as much as 4.7%.
The farm-machinery market has been under pressure since sales peaked in 2022, with manufacturers since then cutting production to minimize inventories. Farmers were already expecting to lose money on crops they’re currently planting.
This year is expected to be the bottom for farm machinery, with AGCO expecting higher annual sales in South American and Asia Pacific before the rebound begins in North America. Yet China’s triple-digit retaliatory tariffs on US products risk deepening the downturn.
Agriculture Secretary Brooke Rollins has said the government is considering more aid payments for American farmers after it started rolling out $10 billion in assistance funds in March. AGCO said higher US net farm income due to increased government aid won’t translate to a demand bump in the near term.
Meanwhile, farmers in Brazil are expected to benefit with more sales of farm goods to China.
“The No. 1 buyer of their product is in the middle of this trade war,” AGCO Chief Executive Officer Eric Hansotia said in an interview. In the last dispute during Trump’s first term, when China pivoted toward Brazil, “not all of it came back, so there was a permanent market-share loss for the US farmer. And when I talk to the farmers, they’re worried about that happening again,” Hansotia said.
The uncertainty comes as the sector has made advancements in autonomy and automation that allow farmers to reduce labor costs even though the high-tech machines come at a premium price.
First-quarter sales fell 34%, AGCO said in a statement. The Duluth, Georgia-based company, whose brands include Massey Ferguson, Fendt and Valtra, maintained its outlook for 2025 sales of about $9.6 billion but said changes in tariffs could alter that result.
Raymond James analyst Tim Thein said AGCO’s unchanged guidance “makes for a relative win.”
Rival CNH — whose brands include Case IH and New Holland — said its 2025 agriculture net sales could decline between 12% and 20%, compared to a previous outlook for a drop of 13% to 18%. Its outlook for adjusted earnings per share was trimmed to 50 cents to 70 cents, down from 65 cents to 75 cents previously, the company said in a statement.
CNH said it hiked prices in the low single-digits as of May 1 for new orders from customers and dealers. About 20% of its component parts for US plants are exposed to tariffs, with 4% coming from China.
“We are working very actively with our supply base on the impacts from this tariff exposure, from the exposure that is certain at this point — the 10% for everyone — and obviously also the exposure on China,” CNH CEO Gerrit Marx said on a conference call with analysts.
— By Michael Hirtzer (Bloomberg)
