The agricultural industry is bracing for another challenging year in 2026, with farm equipment dealers anticipating a rise in prices and a potential decline in sales. According to the January 2026 issue of Farm Equipment, a publication that circulates to U.S. and Canadian ag machinery dealers, 89% of dealers expect prices to rise by 1-6% this year. The report is based on data gathered from several hundred North American farm equipment dealers and was produced by the magazine’s staff at the end of 2025.
The challenges that led to a discouraging 2025 sales year, such as trade disputes, tariffs, high interest rates, and low commodity prices, are expected to continue this year. However, there is a silver lining for farmers looking to invest in new or used machinery. The federal tax changes that fell under the “One, Big, Beautiful Bill” (OBBBA) in 2025 have made 100% bonus depreciation permanent for new and used equipment bought after January 19, 2025. The Internal Revenue Service also increased the Section 179 deduction to $2.5 million (with a $4 million threshold), offering immediate and full write-offs for expensive farm machinery and capital improvements.
The tax changes, along with a 20% Qualified Business Income Deduction (QBID) and higher estate tax exemptions, reverse prior phase-outs and make it easier to expense large purchases such as tractors, planters, drills, sprayers, and combines in the year bought, rather than depreciating them over many years. This could be a good buying sign for farmers, as 46% of dealers say their new equipment inventory is too high, while 40% believe the used equipment inventory is too high. These dealers could be in a “dealing mood” to reduce the extra financial cost of having excess equipment sitting on their lots.
Tariffs are also a major concern for Canadian dealers, as they create inflationary pressure not only on new equipment but also on the cost of parts. The number of dealers that expect their mainline manufacturers to raise prices nearly tripled in 2025 compared to previous years. Only 1.2% of dealers anticipate no increase in new equipment costs this year, while 89% expect increases of up to 6%. Some 17% of AGCO dealers and 14% of Kubota dealers are anticipating a rise in new equipment costs of 10% or more this year.
Looking at precision farming technologies, 88% of dealers rank this as a major growth area this year. This area is of special interest to no-tillers and strip-tillers, as they are among the leaders in investing in newer precision technologies. When it comes to equipment used by no-tillers, 67% of dealers expect planter sales to remain the same or be better than in 2025, while 70% expect the same for air seeders and drills. Some 73% of dealers anticipate sales of self-propelled sprayers will remain the same or be better this year than in 2025, followed by 76% of dealers who expect pull-type sprayer sales to remain the same or better than in 2025.
No-tillers and strip-tillers are in a better position to invest in new equipment during 2026, as they are banking an extra $50 or more per acre with these practices when compared to farmers still doing minimum tillage or conventional tillage. According to the recent 2026 “No-Till Operational Benchmark Study” conducted by No-Till Farmer, here’s what no-tillers and strip-tillers had to say about purchases planned for 2026 to take advantage of the new 100% equipment depreciation rules:
* 20% plan to buy a drone.
* 19% plan to buy a planter.
* 14% plan to buy a drill or a self-propelled sprayer.
* 12% plan to buy a fertilization application unit.
* 10% plan to buy a draper header.
* 10% plan to buy a roller crimper for terminating cover crops.
* 10% expect to buy a pull-type sprayer.
* 9% expect to buy an air seeder.
* 4% expect to buy a strip-till rig or a vertical tillage tool.
* 3% plan to buy a pull-type fertilizer spreader that could also be used to seed cover crops.
* 3% anticipate buying a stripper header.
As the agricultural industry navigates the challenges of 2026, farmers and dealers alike will need to