Farm and Garden Machinery Wholesalers NAICS 423820

Jul 6, 2025 - Rising Farm Debt

• Commercial farms account for the largest share of debt held by US farms despite representing the smallest share of farms by number, according to the USDA’s Economic Research Service. Since 1996, commercial farms’ share of all farm debt swelled from less than half of total sector debt to 69% in 2023. Their high debt share reflects their reliance on financing for capital-intensive activities, including investments in land and equipment. By comparison, the debt share for intermediate and residential farms fell from 1996 to 2023: from 18% to 13% for residential farms and 36% to 18% for intermediate farms, per the ERS. In 2024, farm debt at agricultural banks grew considerably and delinquency rates increased from historic lows amid weaker conditions in the agricultural economy that drove demand for production loans and led to slightly higher farm loan delinquency rates, per the Federal Reserve Bank of Kansas City.
• The high cost of new farm equipment is leading many growers to shift their replacement strategies, with some opting to extend the lifespan of their current machines, while others are investing in late-model, low-hour used equipment through auction or dealer channels, Farm Equipment reports. Leasing activity also began increasing in the second half of 2024 as producers began exploring methods to reduce equipment costs. With farm incomes projected to be lower this year and prices for new machinery high, strong demand for used equipment is expected to persist. “Producers may take a wait-and-see approach in the first half of 2025, potentially delaying equipment upgrades as the spring planting season approaches,” Lucas Scheibe, an AgDirect territory manager in North Dakota told FE, adding “However, if policy and tax conditions remain favorable, improved commodity prices could bolster farm income and influence buying decisions."

• The Trump administration’s 50% import tariff on steel and aluminum – key inputs in farm machinery – threaten to push already high prices for farm machinery even higher, as manufacturers seek to recoup higher input costs by raising prices. Historical data from the 2018 trade war shows that similar tariffs led to a 78% increase in domestic equipment production costs, according to the Association of Equipment Manufacturers. Such cost increases could affect manufacturers and farmers alike, with farmers already facing significant financial pressures. Over the last three decades, the price of 200-hp tractors has risen by 287%, far outpacing inflation, while 300-hp tractors have seen a 275% increase. Trump’s metals tariffs imposed in March – along with other tariffs – could present new financial challenges for the agriculture industry, including depressing sales for farm machinery wholesalers as stressed farmers delay or forego new equipment purchases.
• The producer price index for machinery and supply wholesalers, which measures prices before reaching consumers, rose 6.7% in May compared to a year ago after rising 0.9% in the previous May-versus-May annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices reached a new high in May despite declining sales as farmers pull back on purchases amid rising equipment costs and tariff uncertainty. Employment by farm and garden machinery and equipment merchant wholesalers shrank 5.1% year over year in April while the average industry wage rose 6% over the same period to $31.45 per hour, BLS data show.