After a 2025 that saw soft sales in almost all farm equipment categories, a senior economist is forecasting more of the same in 2026 with used, forage and livestock equipment representing some possible – albeit mild – opportunities.
Low commodity prices, high equipment prices and market uncertainty driven by geopolitical and trade issues may take their tolls this year, said Leigh Anderson with Farm Credit Canada.
However, a clearer vision of the future of U.S. tariffs and the possibility of a new Canada-U.S.-Mexico Agreement (CUSMA) may offer Canadian agricultural producers some degree of market predictability.
Why it matters: Farmers and farm equipment manufacturers alike could do with greater market certainty in 2026.
“They’re just kind of, ‘I’m not making a major investment decision until I get clarity,’ ” said Anderson.
That clarity may come as the U.S. builds up to its midterm elections for congressional seats in November 2026. Anderson said the U.S. will likely — if history is any indication — want to complete some iteration of a new CUSMA before then.
That will hopefully give Canada the opportunity to negotiate U.S. tariffs on the steel and aluminum that is needed to build machinery — at 25 per cent a dominant factor affecting equipment sales in both Canada and the United States.
However, those negotiations will depend on whether the U.S. has any appetite for a new CUSMA in the first place. Anderson is optimistic.
“While there has been talk by the U.S. of letting CUSMA expire, renewal efforts are expected to gain momentum as the White House seeks visible progress before the November midterm elections,” he wrote in a recent FCC article.
“If history is any guide, negotiations eventually lead to a trade deal. A revised CUSMA could bring positive changes, such as lower tariffs on steel and aluminum.”
‘Short-term slowdown’
Recent data from the Association of Equipment Manufacturers (AEM) isn’t exactly encouraging, although there are some bright spots.
Canadian sales of agricultural tractors dropped 6.9 per cent in November 2025 compared to November 2024. However, sales of combines in Canada grew 25.6 per cent in the same timeline.
The U.S. appeared to be in a worse position, with tractor sales dropping 19.6 per cent year over year and combine sales declining 35.2 per cent under the same metric.
“This month’s numbers reflect the continued economic pressures farmers have been navigating for the past several months,” wrote AEM senior vice-president Curt Blades in a news release.
However, he also expressed some optimism.
“While we’re seeing a short-term slowdown in sales, equipment manufacturers remain focused on supporting farmers with the tools and technologies that deliver efficiency and long-term value. As we move into 2026, we’re watching market conditions closely and remain confident in the industry’s underlying strength.”
Canadian sales outpace U.S.
The AEM year-to-date Canadian sales figures for 2025 reveal more specific trends.
Year-to-date sales of tractors in November were down 0.3 per cent compared to 2024, while combine sales were up 1.6 per cent.
Total four-wheel drive tractors sales fell by 22.5 per cent. Total two-wheel drive tractor sales rose by 0.8 per cent.
In November, sales of two-wheel drive tractors under 40 horsepower were down 10.2 per cent compared to the November 2024 year-to-date, while sales of tractors with more than 100 h.p. were down 18.6 per cent. Sales of tractors between 40 and 100 h.p. were up 11.8 per cent compared to the same month last year.
Four-wheel drive tractor sales fell by 50.6 per cent compared to last November. Combine sales were up 25.6 per cent.
Canadian equipment sales fared better than those of the U.S. At the end of November, year-to-date sales of all tractors were down 9.7 per cent in the U.S. Combine sales were down 38.3 per cent.
Overall, farm equipment sales in both countries have been trending down in recent years.
In late 2023, FCC warned that the year’s post-COVID robust sales were unlikely to continue. The farm lender said sales had been strong thanks to the resolution of pandemic-era supply chain issues and strong farm cash receipts. However, drought in Western Canada and softening commodity prices were likely to take their toll.
Sales declined in 2024 as predicted, and in November 2024, FCC again predicted a slump in 2025 as farmers faced low commodity prices and high equipment costs.
This was before U.S. President Donald Trump took office and announced sweeping tariffs, including imported steel and aluminum.
In late November, farm equipment manufacturer Deere and Co. said it expected tariff impacts on the company to come in around US$600 million (C$826.1 million). It predicted a pre-tax tariff hit of around US$1.2 billion (C$1.65 billion) in 2026.
Reduction of tariffs alone would go a long way toward solving the industry’s plight, said Anderson.
“I think that would really help the equipment market going forward the next several years because that’s adding a lot of extra cost to our manufacturers, whether it’s here in Canada or the U.S.”
Used over new
Though still quite modest, the 2026 outlook for ag equipment looks stronger for used tractors than new across most categories, said Anderson.
FCC forecasts say used tractors with 40 to 100 h.p. are expected to rise 2.8 per cent over 2025,100 h.p. or more are expected to rise 1.7 per cent while four-wheel drives sit at 2.3 per cent sales growth.
By comparison, new 40 to 100 h.p. tractors are forecast to drop by 4.7 per cent from 2025, more than 100 h.p. by 5.6 per cent and four-wheel drives by 1.6 per cent. Sales of new tractors with less than 40 h.p. are expected to grow 3.1 per cent compared to 2025.
However, these forecasts don’t tell the whole story because many of them come off downward sales figures between 2024 and 2025.
The estimates compared to five-year-average tractor sales are illuminating. One notable decline using this metric is a 22.1 per cent drop for used tractors with 40 to 100 h.p., while new 100 h.p. and more tractors are set to drop 19.5 per cent in 2026 compared to the five-year average.
“That weakness will persist through the new year, but it looks like with farmers moving towards real cost-consciousness, there may be opportunities for the equipment dealers and anyone selling used equipment,” said Anderson.
Bullish on forage
Expectations for used forage and haying equipment — driven by ongoing high prices in the livestock sector — are bullish, provided those prices remain strong, Anderson said. Even though baler sales are only expected to grow 1.6 per cent, they’re jumping off a 33.2 per cent increase between 2024 and 2025.
The forecast for used forage harvesters is steady: three per cent off zero growth in 2025.
A big question, however, is whether livestock producers will gravitate toward new-to-them equipment instead of keeping their existing older machines running until they spout their last fumes of exhaust. This is a common thread in livestock production equipment, said Anderson.
“They really do prefer to reinvest back in their herd.
“They’ll keep repairing some of their equipment for a long time. But having said that, some of them are already using really old equipment, and maybe this time they will do some upgrading.”
A favourable trade framework between the U.S. and China has potential to lift many economic boats, including Canada’s, said Anderson. If it arrives in early 2026, it could stabilize ag markets and boost both soybean exports and farmgate prices for both the U.S. and Canada. However, if progress stalls, expect the downturn in equipment sales to continue.
“Trade between the U.S. and China is still very critical for agriculture markets. If they can get some progress there, that does actually benefit Canada, especially in the oilseed market where U.S. soybean futures, for instance, are our major reference price for our canola and soybean crops here in Canada.”
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