Jefferies: Farm equipment sales fall in July amid tractor decline

Investing.com -- Agricultural equipment sales continued to decline in July, with total tractor sales falling 10.6% year-over-year, according to a report from Jefferies.

Large tractors over 100 horsepower dropped 5.6% compared to the same period last year, while combine sales decreased 65% year-over-year. The decline in combines followed a 7.4% increase in June.

Total high-horsepower equipment retail sales in North America fell 20% year-over-year in July, a steeper drop than the 5.8% decline recorded in June. Medium tractors in the 40-100 horsepower range decreased 7.8% year-over-year, while small tractors under 40 horsepower fell 12% year-over-year.

Tractor inventories as of the end of June stood at 6.2 months on hand, with unit inventories remaining relatively flat month-over-month for small and large equipment, and up about 2% for medium equipment. Combine inventories increased 4% in June, bringing ending inventory to 3 months compared to 2.9 months in May.

Equipment manufacturers maintain that the North American agricultural market is at or near the bottom, with production levels remaining minimal. Original equipment manufacturer forecasts project a 15% to 20% decline for North America in 2026.

U.S. farmer sentiment improved in July, with the Purdue/CME Ag Economy Barometer rising to 126, up 13 points month-over-month. The increase was attributed to rising corn and soybean prices.

Wheat prices climbed about 9.6% over the past month, while corn and soybean prices remained flat. Year-to-date, corn is up 1.4%, wheat has risen about 33%, and soybeans have increased about 16%. Elevated input costs remain a top concern for farmers.

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