Investment bank Baird has warned that a meaningful recovery in North America’s large agricultural equipment market may not arrive until 2028, citing continued oversupply of key crops and persistent pressure on farm profitability. The revised outlook follows the latest U.S. Department of Agriculture (USDA) crop reports, which showed abundant supplies of corn and soybeans despite expectations that inventories would gradually tighten.
The firm believes the current market conditions could delay farmers’ willingness to invest in expensive machinery, extending the industry’s downturn beyond earlier forecasts.
Crop Prices Remain Under Pressure
According to the USDA data, U.S. corn ending stocks climbed to 5.294 billion bushels, up 14% from a year earlier and among the highest levels seen in decades. Corn acreage for the 2026-27 season also exceeded expectations, reinforcing concerns about oversupply. Although corn prices briefly moved above $4.10 per bushel, they remain well below the estimated $5.00 per bushel farmers generally need to break even.
Soybean fundamentals paint a similar picture. Ending stocks slightly exceeded market expectations, while prices remain significantly below Baird’s estimated breakeven level of around $13.00 per bushel. Wheat inventories also remained healthy, further highlighting the broad supply imbalance across major crops.
Weak Farm Economics Weigh on Equipment Demand
Baird noted that falling crop prices, elevated production costs, and favorable growing conditions have made it difficult to identify a catalyst that could meaningfully boost farm income in the near term. While government support programs have helped cushion some financial pressure, they have not been enough to encourage large-scale equipment purchases.
The investment bank now believes the risk is increasing that equipment orders for the 2027 selling season could decline compared with the previous year, delaying the industry’s recovery even further.
Long Wait for Manufacturers
The outlook presents another challenge for manufacturers of tractors, combines, and other large agricultural machinery, many of whom have already been navigating weaker demand over the past two years. Unless crop prices receive a significant boost—potentially from adverse weather reducing supply or other unexpected market developments—farmers are expected to remain cautious about major capital investments.
Baird’s revised forecast suggests the agricultural equipment industry may need to prepare for an extended period of subdued demand before a stronger recovery finally emerges toward 2028.
