Josh Enlow, who operates Enlow Tractor Auction in Tulsa, Oklahoma, has seen a shift in his customer base. Farmers and ranchers who once preferred new machinery are now looking for used equipment. “The increases in new pricing has definitely driven people back to the used market,” Enlow said.
Over the past eight years, prices for new tractors have risen by at least 60%, with some models costing more than double what they did before. This increase means some tractors now cost at least $250,000 more than they used to, according to data from the University of Illinois Extension.
John Deere, a major supplier of agricultural machinery in the United States, is facing challenges due to these rising costs and recent trade policies. The company reported a record profit two years ago but has since experienced a decline. President Donald Trump’s tariffs on steel and aluminum have increased costs for John Deere by $300 million so far, with another $300 million expected by year-end. Last month, John Deere laid off 238 employees across factories in Illinois and Iowa.
John Deere employs about 30,000 workers at 60 facilities nationwide and assembles over 75% of its machines in the United States. Only about 25% of its components are sourced from abroad.
Demand for new farm equipment is closely tied to crop prices. When prices are high, farmers buy new machines; when prices drop, they hold onto older equipment or seek out used options. Currently, corn prices are about half what they were at their peak in mid-2022, while soybean prices have dropped by 40%.
John Deere expects sales of large agricultural machinery—its main revenue source—to fall by up to 20% this year and predicts weak demand will continue into next year.
The company declined to comment for this story. On an earnings call, Josh Beal, director of investor relations at John Deere, noted that customers face “increasingly dynamic markets” because of tariffs, high interest rates and changes in global trade policy that “drives caution as they consider capital purchases.”
Projections from the Department of Agriculture suggest near-record yields for corn and soybeans this fall. However, U.S.-China trade tensions have reduced demand from China: after retaliatory tariffs on U.S. soybeans were imposed earlier this year following steep U.S. tariffs on Chinese goods, exports to China fell by 51%. U.S. growers are expected to receive $3.4 billion less for their soybean crop compared to last year.
With uncertainty over export markets and other risks—including possible changes to federal farm support programs—farmers remain hesitant about large purchases like new tractors.
Some issues began before the recent tariff changes; John Deere had excess inventory at dealerships early last year and responded by reducing factory output and laying off over 2,000 workers while offering better financing terms to clear stock.
“We fundamentally believe that these actions will lead to more favorable cycle dynamics than in previous downturns,” said John May, CEO of John Deere, during an August 2024 earnings call.
Despite current challenges, Kristen Owen of Oppenheimer & Co., believes conditions could improve for John Deere in 2026 thanks partly to bonus depreciation rules included in recent tax legislation allowing farmers larger immediate tax breaks on equipment purchases—a change expected to boost sales.
Owen also pointed out that competitors such as Kubota, Fendt and Mahindra manufacture more machines abroad and may be hit harder by tariffs on foreign-made machinery.
“The expectation is that even if demand is tepid, you still have earnings growth in 2026,” she said.
Still, many farmers remain cautious amid ongoing uncertainties around exports to China, future government support programs and whether interest rates or steel prices will change soon.
Kristen Owen summed up industry sentiment: while agriculture always involves uncontrollable risks like weather or pests,“pen-stroke risk”—the impact of sudden policy changes—has become even harder for businesses to manage.
