Agricultural machinery demand was approaching a cyclical bottom in 2026, but no synchronized global upturn had formed, with replacement demand leading an L-shaped recovery [S1][S2].
Large tractors and harvesters remained under pressure, while livestock, dairy, compact and selected medium-sized equipment showed greater resilience across North America, Brazil and other markets [S1][S2].
Recovery Is Emerging Through Uneven Equipment Segments
John Deere's fiscal third-quarter 2026 results therefore offer only a partial guide to company performance in a market still marked by uneven recovery.
AGCO's performance likewise remains difficult to assess without its first-half 2026 North American tractor retail-sales decline or its full-year large-machinery market forecast.
The core comparison is therefore not simply small equipment versus large equipment. Kubota's 0–40 hp North American segment remained subdued, and its 40–100 hp category was also under pressure, while selected medium models performed better than the broader market [S1][S2].
Dealer Inventory Defines the Recovery Sequence
Dealer inventory normalization must precede a sustained increase in farmer demand. OEMs reduced output throughout 2024 and 2025 to bring elevated inventories back into alignment with sales, leaving the sequence as dealer inventory normalization, OEM production normalization and then end-market recovery [S1].
AGCO and CNH are pointing to gradual stabilization while warning against interpreting current developments as the beginning of a conventional upturn.
Rising OEM production should not be treated as proof of restored end demand. Supplier and foundry orders can stabilize before tractor and harvesting-machine sales accelerate, so production data and retail sales need to be evaluated separately [S1][S2].
Farm Economics Still Determine Purchase Timing
Declining income for many farming operations and persistently high input costs weighed particularly heavily on the market for large tractors and harvesting equipment. Replacement machinery and equipment required for productive livestock and dairy operations performed better than discretionary purchases tied to farm expansion [S1][S2].
Used-equipment pricing remained under pressure, weakening farmers' trade-in values, while new-equipment prices stayed relatively firm as manufacturers reduced production and faced higher material costs [S3]. One market assessment expected new-equipment prices to increase by 2–4%, in line with an average year rather than a demand-driven price surge [S3].
Evolving financing strategies, cautious spending, value-driven purchasing, and strong interest in used equipment were major themes in the 2026 farm-machinery market. A forecast 2–4% price increase for 2027 deliveries did not imply a surge in orders, and 2026 order books were already filled at a lower production level [S3].
North America Is Near a Low Point, Not a Full Rebound
North America remained one of the hardest markets in 2026, with high-horsepower tractors and combines particularly affected [S1].
Demand from livestock customers held up comparatively well, and selected medium-sized Kubota tractors outperformed the overall market [S1]. However, private buyers in the 0–40 hp segment faced inflation and weak consumer conditions, showing that horsepower alone does not explain sales performance [S1][S2].
Market Forecasts Point to Growth, With Uneven Forecast Quality
Mordor Intelligence estimated the agricultural machinery market at USD 193 billion in 2026, with a forecast of USD 206 billion in 2027 and USD 280.6 billion by 2032, representing 6.38% CAGR over 2027–2032 [S5].
The agricultural machinery market is forecast to grow from USD 193 billion in 2026 to USD 206 billion in 2027 and reach USD 280.6 billion by 2032 at a 6.38% CAGR, with Asia-Pacific identified as the largest market and North America as the fastest-growing market. A separate forecast put global agricultural machinery growth from 2026 to 2030 at USD 55,457.8 million and 5.8% CAGR [S7].
Which Buyers and Suppliers Are Positioned for Recovery
The early recovery case favors operators replacing essential equipment, livestock and dairy businesses, and selected compact or medium-power applications rather than customers expanding capacity solely on optimistic commodity-price expectations [S1][S2]. Large arable operators and suppliers exposed to heavy tractor and harvester castings face a slower route to stronger order books [S1][S2].
Three indicators are more useful than a broad headline: dealer inventories must normalize, OEM production must rise without rebuilding channel stock, and retail sales must confirm demand from customers [S1]. A fourth signal is farm profitability, because favorable crop prices relative to fuel, fertilizer and freight costs determine whether replacement becomes expansion [S1].
The 2026 evidence supports a segmented bottoming process rather than a broad recovery claim. Track dealer stock, the new-versus-used price gap, application-level tractor sales and OEM production separately through 2027 to distinguish normalization from genuine end-market expansion [S1][S2][S3].