Back to Basics for Uncertain Times

Last summer at the Farm Progress Show, the general sentiment among exhibitors was a lot of the uncertainty would ease post-election, regardless of the outcome. That’s usually true in election years. 

In November, that seemed to be the case. The Purdue Ag Economy Barometer showed positive readings. But, 30 days after President Trump’s inauguration, we’ve been hit with a flurry of news, and an uncertainty has returned. 

Walking the floor at the National Farm Machinery Show in Louisville, Ky., last week, I found the mood to be mostly positive. Yet between the threat of tariffs and funding freezes, it was hard to get a good sense of what to expect in the rest of 2025. For the most part, shortline manufacturers weren’t overly concerned, with many of them viewing tariffs as simply a bargaining tool. 

OEM Response to Tariffs

Following CNH Industrial’s Q4 2024 earnings call on Feb. 4, JP Morgan analyst Tami Zakaria reported the costs of tariffs would likely be passed on to customers. 

She noted that CNH is monitoring its sourcing of components from Mexico, Canada and China, which total about $400 million. 

A Feb. 14 article by The Wall Street Journal reported John Deere should be able to deflect higher costs this year from U.S. tariffs on imported goods. Bob Tita reported that Deere produces more than 75% of the equipment of sales domestically and that it exports more equipment from the U.S. than it imports. 

Deere spokesman Josh Beal says Deere will rely on a duplicate supplier network to lower its exposure to tariffs on imported components. 

Back to Basics

Regardless of where tariffs end up or what happens with federal payments to farmers, dealers had already forecast another challenging year in 2025. According to Ag Equipment Intelligence’s 2025 Dealer Business Outlook & Trends Report, 64.3% of dealers expect new equipment revenues will be down 2% or more in 2025. 

Better for 2025 are revenues from dealers’ aftermarket expectations. The majority of dealers forecast parts and service revenues to be as good or better than 2024. 

The parts and service business is the lifeblood of every farm equipment dealership. With new equipment unit sales expected to lag at least through the end of 2025, a laser-focused parts and service business will never be more important to your operation. 

With that in mind, and on the advice of our Dealer Advisory Board and Dealership of the Year Alumni Group, the 2025 Dealership Minds Summit, July 29-30 in Iowa City, is dedicated to the aftermarket business. 

During this dealer-only meeting, we’ll have dealers and other industry experts on hand to share how they’ve optimized their aftermarket operations. Our goal with this year’s event is to help you protect every fractional percent of margin that’ll be necessary to ride out the bumpy road ahead. 

We’re getting the program together right now, and have announced our first presenter, industry veteran George Keen. See p. 16 for his article on dialed-in sales management, the first of a new series to help you succeed in 2025 and beyond.

Look for the full program in the next issue. To learn more and register, visit DealershipMindsSummit.com.