In December 2024, the United States witnessed a significant downturn in tractor and combine sales across all categories. According to data from the Association of Equipment Manufacturers (AEM), total tractor sales plummeted by 11.3% compared to the same period in the previous year. This decline reflects broader economic challenges faced by the agricultural sector throughout 2024, characterized by high interest rates and market uncertainty. Despite these difficulties, industry leaders remain optimistic about potential improvements in 2025. The entire year saw consistent underperformance relative to the five-year average, with every month falling short.
The agricultural machinery sector experienced a challenging year, culminating in a disappointing December. Curt Blades, senior vice president at AEM, noted that the trends observed in December mirrored those seen throughout 2024, indicating a persistent softness in the market. The association attributes this trend to various economic factors, including elevated interest rates and overall uncertainty within the agricultural economy. However, AEM remains hopeful for the future and is committed to advocating for policies that will positively influence the industry.
Specifically, the performance of different types of tractors varied. For instance, sales of two-wheel-drive tractors under 40 horsepower decreased by 7.5% in December, while year-to-date sales dropped by 14%. Similarly, the sales of two-wheel-drive tractors between 40 and 100 horsepower fell by 9% in December, with an annual decline of 9.9%. The most significant drop was observed in tractors over 100 horsepower, where December sales were down by 26.6%, and year-to-date sales decreased by 17.5%. Four-wheel-drive tractors also suffered, with December sales dropping by 27.5%.
Combine sales followed a similar trajectory, with a 26.4% decrease in December compared to the same period last year. Year-to-date combine sales were down by 24.3%, highlighting the widespread impact of market conditions on various segments of agricultural equipment. Inventory levels for tractors and combines also reflected these trends, starting at higher levels in December but facing reduced demand.
Despite the challenging year, industry experts are looking forward to 2025 with cautious optimism. They anticipate that new policies and economic shifts could provide a much-needed boost to the agricultural machinery sector. The focus will be on addressing the underlying issues that have constrained growth and exploring opportunities for recovery in the coming months.