Josh Enlow buys and sells used tractors every day, filling a vast lot in Tulsa, Okla., with hundreds of agricultural and construction machines.
His customer base has shifted recently, as farmers and ranchers who would buy only new machines are now coming to his Enlow Tractor Auction interested in his secondhand equipment.
“The increases in new pricing has definitely driven people back to the used market,” Mr. Enlow said.
The list price for new tractors rose at least 60 percent over the last eight years, according to the University of Illinois Extension, with some models more than doubling in price, costing at least $250,000 more than they used to.
That’s bad news for companies like John Deere, the leading supplier of agricultural machinery in the United States. The company reported a record profit two years ago, but President Trump’s tariffs and trade policies are making the market more challenging and unpredictable for the business and its customers.
One of the country’s largest manufacturers is worse off now than it was six months ago. Last month, John Deere said net income in its most recent quarter was down 29 percent from a year earlier. Higher tariffs, primarily on steel but also on aluminum, have cost the company $300 million so far, with nearly another $300 million expected by the end of the year. This summer the company laid off 238 employees across factories in Illinois and Iowa.
Yet John Deere is just the sort of manufacturing powerhouse that Mr. Trump says he wants more of in the United States. The company, based in Moline, Ill., has made farm equipment since 1837. Its green-and-yellow tractors, combines and sprayers help farmers feed the country and produce billions of dollars’ worth of crops for export.
The company employs 30,000 workers in 60 facilities across the country and said more than 75 percent of its machines were assembled in the United States. Just 25 percent of the components used in its products come from foreign countries, John Deere said.
Demand for new agricultural equipment is mostly determined by crop prices. When crop prices are high, farmers flush with cash buy new equipment. When crop prices slump, they’ll hold on to an aging tractor or more strongly consider the used market.
Prices are currently low, with corn selling for 50 percent of the highs seen in mid-2022. Soybean prices are down 40 percent over the same time frame.
John Deere said that it expected 2025 sales for large agricultural machinery — the source of most of its revenue — to fall 15 to 20 percent and that the malaise would continue into 2026.
John Deere declined to comment.
On the company’s most recent earnings call, Josh Beal, the director of investor relations, said customers were “operating in increasingly dynamic markets” because of tariffs, high interest rates and a changing global trade environment that “drives caution as they consider capital purchases.”
Corn and soybean crop yields are expected to reach near-record highs this fall, according to projections from the Department of Agriculture. While that’s good news if there are plenty of buyers — U.S. farmers exported $13 billion worth of soybeans to China in 2024 — new tariff policies have weakened demand from China.
After Mr. Trump announced steep tariffs on Chinese goods this year, China placed retaliatory tariffs on U.S. soybeans in March. Soy exports to China are down 51 percent this year, and the country hasn’t made any advance purchases of soybeans for the upcoming harvest. U.S. growers are expected to receive $3.4 billion less for their soybean crop than they did last year, according to the Agriculture Department.
For many growers, the prices are so low that they will lose money on each acre planted.
“How can companies and farmers plan for the long term when you don’t know what the cost of your inputs will be or what your market will look like in the weeks to come?” asked Tad DeHaven, a policy scholar at the Cato Institute, a think tank that favors free markets. “These businesses, whether John Deere or a craft brewery or anything in between, are trying to navigate this. They are trying to do the best they can to cut costs and to hang in there.”
New tractors are one of the largest costs for farmers, so to save money they are choosing to repair their machines or perhaps buy cheaper or less powerful ones.
Yet some of John Deere’s woes began before tariff policies shifted. There was a glut of the company’s machines sitting at dealerships at the beginning of last year. In response, the company ran production at its factories well below capacity, laying off more than 2,000 workers. It also offered more attractive financing rates to buyers to clear out inventory. It was supposed to be a short-term expense to fuel a long-term recovery in 2025 and 2026, the company said at the time.
“We fundamentally believe that these actions will lead to more favorable cycle dynamics than in previous downturns,” said John May, the company’s chief executive, on an earnings call in August 2024.
Instead, sales are now expected to remain soft for the foreseeable future.
Kristen Owen, a managing director at Oppenheimer & Company, still thinks 2026 will be a better year for John Deere. The bonus depreciation changes in the recently passed tax and spending law could help raise company sales. The rule allows farmers to immediately receive a large tax break for equipment purchases.
And since John Deere’s competitors, such as Kubota, Fendt and Mahindra, manufacture more of their machines abroad, they are expected to be hard hit by tariffs on foreign machinery.
The bonus depreciation changes will drive sales, Ms. Owen said. John Deere is doing well in some foreign markets, she added, and its construction equipment business is expected to pick up steam next year.
“The expectation is that even if demand is tepid, you still have earnings growth in 2026,” she said.
But as long as widespread uncertainty looms, farmers will be hesitant to make expensive purchases. They do not know when, or if, large-scale exports to China will resume, or if a new farm bill would increase subsidies or income support programs. They do not know if the Federal Reserve will cut interest rates or if steel prices will remain high.
Everybody in the agriculture business is used to hard-to-control risks, as heat, rain, pests and diseases play a huge role in profitability, Ms. Owen said. What is proving even harder to control is what she termed “pen-stroke risk,” the risk that with a strike of a politician’s pen, everything will change again.
Kevin Draper is a business correspondent covering the agriculture industry. He can be reached at [email protected] or [email protected].
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