Ag Equipment Sales Continue to Tumble

The year has entered its final weeks and the glum outlook for agricultural equipment manufacturers looks only to continue in 2025.

In its final report of its fiscal year, Deere & Company reports net income of $1.245 billion for the fourth quarter ended Oct. 27 compared to net income of $2.369 billion for its fourth quarter in 2023.

For fiscal year 2024, net income attributable to Deere & Company was $7.100 billion, compared with $10.166 billion in fiscal 2023.

Deere is not expecting its numbers to improve next year. Net income attributable to Deere & Company for fiscal year 2025 is forecast to be in the range of $5.0 billion to $5.5 billion. That's a number built around an expected 15% decline in production and precision ag sales, a 10% decline in small ag and turf sales, and a 10% to 15% decline in sales of Deere's forestry and construction equipment.

As Deere goes, so goes the industry. While investors await year-end numbers from manufacturers such as Case IH and AGCO, it will surprise no one that they will not be positive.

CNH Industrial (Case IH and New Holland) reported rough sailing for the three months ended Sept. 30, 2024. Net income reached $310 million in that quarter, compared to net income of $540 million for the three months ended Sept. 30, 2023.

Net CNH agricultural sales for the first nine months of 2024 are $10.6 billion, down 20% from the same period in 2023.

As it reported its third quarter results, CNH also updated its fiscal year 2024 outlook. It expects ag segment net sales will be down between 22% and 23% compared to 2023.

AGCO (Fendt, Massey Ferguson) also reported a difficult third quarter, indicating net sales of $2.6 billion for the third quarter ended Sept. 30, 2024 -- a decrease of 24.8% compared to the third quarter of 2023.

Net sales for the first nine months of 2024 (January through September) were approximately $8.8 billion, a decrease of 17.3% compared to the same period in 2023.

CNH and AGCO will report their full-year financials early in 2025.

None of this is a surprise to investors or manufacturers looking out over the industry this year. Employee layoffs and reductions in production schedules are a common way of combating downturns. And, they have been widely used.

Total two-wheel drive tractor sales for the first 10 months of the year (January through October) are down 13.6%, according to the Association of Equipment Manufacturers (AEM). All farm tractor sales are down 13.3% the year with only two reporting months remaining.

Small tractor sales, those under 100 hp, are primarily responsible for those numbers as they, by far represent the largest number of tractors sold. Less-than-40 hp tractor sales are down 14.7% for the year through October (118,486 units sold compared to 138,956 sold during the first 10 months of 2023), AEM reports. Forty to 100 hp tractor sales are down nearly 10% (46,780 units sold over the first 10 months of 2024, compared to 51,863 units sold same in the period in 2023).

Large tractor sales fare no better, AEM finds. Sales of two-wheel drive tractors, 100 hp and more are down more than 15% for the first 10 months of the year, or more than 3,000 units. Sales of four-wheel drive farm tractors remain in plus territory, but by only a bit. Four-wheel-drive sales are up 1.3% for the year (Jan-Oct) or about 50 units.

Combine sales are off sharply, as well. Sales from January through October this year are down 23.1%, AEM reports. That percentage equals about 1,500 combines.

Dan Miller can be reached at dan.miller@dtn.com

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