Farm Equipment Financing Stays Costly as Sales Slip
Dealers and buyers should plan for high borrowing costs while used tractor values hold firm into late 2026.
Updated on Nov. 7, 2026 in Agriculture
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Equipment prices are not expected to fall anytime soon, even as farm machinery sales show signs of recovery. U.S. agricultural tractor sales fell 16.4% and combine sales fell 10.9% in September from a year earlier, affecting dealers and farm equipment buyers.
Why it matters
Sticky inflation has pushed the Federal Reserve toward a hawkish stance, keeping borrowing costs high for buyers and dealers. Rising diesel prices and multi-decade-high long-term yields add to financing pressure on equipment purchases.
Point-of-sale equipment financing fell 20% in 2025, and U.S. sales of agricultural tractors and combines declined 16.4% and 10.9% in September from a year earlier. Used tractors with 100 hp or more are valued nearly 5% above their level from a year ago, a sign of tight supply on the used side.
The players
Federal Reserve
The central bank of the United States, which sets benchmark interest rates that influence equipment financing costs for dealers and buyers.
Greg Roberg
An industry observer who expects another Federal Reserve rate increase before Christmas.
The details
Machinery manufacturers have cut production to match weaker demand, which has shrunk newer equipment on dealer lots. Rising commodity prices that have stabilized in recent months are beginning to lift farm machinery sales, but financing costs remain elevated. Because rates are set by the Federal Reserve's response to sticky inflation, dealers and buyers face higher borrowing costs for the foreseeable future.
Timeline
2025: Point-of-sale equipment financing fell 20%.
September 2026: The Federal Reserve raised interest rates, and tractor and combine sales declined from the prior year.
October 2026: The Federal Reserve took no action at its meeting.
Before Christmas 2026: Another Federal Reserve rate increase is expected.
Market Landscape
The Federal Reserve's September rate increase and its October pause have kept financing costs elevated for farm equipment buyers. Dealers are reporting cautious optimism for late 2026 into 2027, though the outlook still depends on rate direction.
Dealers and farm operators should factor elevated financing costs into equipment purchase timing and budgeting. Used equipment values remain firm, which may influence trade-in and resale decisions.
The takeaway
Watch the Federal Reserve's next rate decision and dealer financing terms before committing to large equipment purchases. Consult a qualified accountant or financial advisor before making capital expenditure decisions.
What happens next
Another Federal Reserve rate increase is projected before Christmas 2026, which would affect equipment financing costs before year-end.
Further reading
For broader context on how farm input costs are shaping the sector, see Agriculture.
Source note: This article includes information reported by Farm Progress.
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