Global agricultural machinery demand hits lowest level in over a decade — AGCO

Global demand for agricultural machinery has fallen to its lowest level in more than a decade amid rising farming costs, low agricultural commodity prices and uncertainty across global markets. AGCO CEO Eric Hansotia made the statement on October 29 during the US agricultural equipment manufacturer’s third-quarter 2026 earnings call, Bloomberg reported. According to Hansotia, the industry is currently at the bottom of its downturn cycle, with some recovery in demand expected only in 2027.

The main factors behind declining agricultural machinery purchases include record diesel prices, rising fertilizer costs, high interest rates and pressure on farmers’ incomes. Higher agricultural production costs are limiting farmers’ financial capacity, forcing them to postpone machinery fleet upgrades and investments in new equipment. Meanwhile, low grain and oilseed prices, partly driven by the buildup of substantial supplies during the US autumn harvest, are further weakening farmer sentiment.

Amid weak demand, AGCO lowered its full-year 2026 sales outlook, although the company’s third-quarter financial results exceeded analysts’ expectations. According to Hansotia, the global agricultural machinery market is experiencing its deepest downturn in more than a decade. The company continues to expect a gradual recovery in the industry next year, although the pace will depend on improvements in farmers’ financial conditions and the stabilization of production costs.

Geopolitical risks and changes in international trade policies are creating additional uncertainty for agricultural machinery manufacturers. Conflicts in the Middle East and Black Sea regions continue to disrupt traditional supply routes for grain, fuel and fertilizers, affecting farming costs across different countries. Meanwhile, unstable export flows and trade tensions between major economies are making it more difficult to forecast agricultural producers’ incomes, discouraging investments in expensive machinery.

The challenging situation in the agricultural sector is also reflected in the results of global agribusiness trader Bunge, which reported elevated uncertainty in international markets. Despite maintaining its full-year earnings guidance, the company expects lower soybean crushing margins in the US, Brazil and Europe. Together, these trends indicate continued financial pressure on agribusinesses, which could restrain demand for tractors, combines and other agricultural machinery until commodity market conditions and production profitability improve.

Tags: machinery