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North American farmers are cutting back on their farm machinery to save money as the season of unprofitable growing approaches

Salespeople for farm machinery are closing out a disappointing season of farming shows in North America, as farmers prepare to plant their spring crops without much new equipment.

Farmers are still buying but have cut back on big-ticket purchases due to the high cost of fuel, machinery and fertilizer. They also avoid purchasing expensive items because global grain gluts have driven down crop prices.

The manufacturer Degelman Industries' Chad Jones said, "They may not buy a million-dollar combine but they will buy a $100,000 tool." He was standing in front of his yellow-painted rockpickers and rippers, as well as other equipment from the company, at Canada's Farm Show, held in March.

According to the Association of Equipment Manufacturers (AEM), a group that represents the major players in North American agriculture, farmers are still spending, but at a much lower level than they did in previous years.

The group said that in March, sales of large-ticket items such as tractors and combine were down between 30 %?and 40 % in the U.S. compared to last year.

Farm machinery sales are being hammered due to the squeeze on farmer's finances, exacerbated by President Donald Trump's tariffs in his trade war that has increased the cost of production for already expensive machines such as tractors and combine harvesters. The items are made from a large amount of steel, and sometimes with imported components.

Trump's administration plans to impose a 25% tariff, rather than a 50% one, on finished goods imported from abroad that contain aluminum and steel. This will increase the price of these products. Goods that are primarily made of steel and aluminum such as tractors and combine will still be subject to the 50% tariff in place since almost a full year.

John Deere's official stated that in its latest quarterly earnings call the company estimated tariffs would cost $1.2 billion by 2026. He also said that 2025 tariff costs were not passed onto farmers.

Trump called for price cuts from manufacturers last Friday to help farmers.

Trump's tariffs may be the cause of the industry's woes, but they are not the only problem. Kip Eideberg of Association of Equipment Manufacturers said that the easiest way to reduce the price of machinery would be to "significantly scale back the tariffs which are hitting the manufacturer, and the retaliatory?tariffs which are hitting farmers."

The trade wars between the U.S. and China have affected U.S. crop sales. The soybean export market has been depressed for several months, resulting in huge stocks and a drop in crop prices.

Leigh Anderson, economist at Farm Credit Canada, said that the farmers were concerned about their profitability for the next growing season. This has led to a delay in replacing equipment. He said that farmers have delayed purchases and hung on to older equipment longer.

The farm show in Regina showed that farmers were not interested, as they did not test drive tractors or other large machinery. The show attracted over 5,000 attendees, but many of the displays were quiet.

Eideberg, from AEM, said that it is fair to say that the purchasing behavior has changed. AEM hopes to cut tariffs because it is difficult to lower the cost of machinery and fertilizer production once they are high.

Eideberg said, "That is the immediate relief which will make a difference for both farmers and manufacturers." (Reporting and editing by Emily Schmall, Aurora Ellis and Ed White)

(source: Reuters)