A manufacturer who provides OEM work to other farm equipment manufacturers told AEI that “Ag is on the fastest roller coaster ride down in a quarter-century” and that a handful of its OEMs reduced their schedules in the first week of August.

“I’ve never seen this sort of panic in a 10-day period,” he says. “Usually, the OEMs are dialed in to their needs by July. Now they’re wanting us to provide them inventory terms well beyond the 8-week firm zone when historically can’t just cancel orders. In our business, we need to plan for their needs 6 months ahead of time.”

The executive pointed to 4 reasons for the increased concern, beyond what’s normal in an election year:

1. “Equipment dealerships are so big now that they don’t have to stock to make things happen anymore. When 5-store dealerships were typical, before the huge consolidated dealer groups, a farmer would go to a couple of different stores, get the price, and buy and be done with it. That doesn’t happen anymore; they don’t have the stocking units nor the motivation that it brings.”

2. “Today’s salesman at the dealership is just a ‘middle man.’ If the finance guy doesn’t want to approve a farmer for the sale it doesn’t happen. It used to be that the salesperson would push and negotiate and do whatever it takes to get the deal done, including discussing future trades. That doesn’t happen anymore.”

3. “Grain prices fell faster than any of us expected. We thought we’d see a rally by June or July. Guys are selling their 2025 crop now thinking the commodity pricing could get worse.”

4. “Most farms currently don’t need the new equipment; they can run with what they have.”

Watch the full version of this episode of On The Record.