Editor's Note: This article was originally published in the July 15, 2025 edition of Ag Equipment Intelligence. To view AEI content as it's published, you can subscribe to the monthly newsletter here.
The 2025 Executive Briefing Mid-Year Review, held June 6, provided an update on the equipment industry through the first half of the year as well as how the first 6 months are impacting original forecasts for the year. During a high-level panel discussion, Steve Hunt, president of Case IH dealer H&R Agri-Power, Craig Harthoorn, retired president of Oxbo's Forage Division and Ryan Schaefer, vice president of New Holland North America, shared their thoughts.
While manufactures and dealers alike were calling for a softer year heading into 2025, the year has proven to be perhaps more challenging than expected.
"Farm profitability and net farm income is always one of your biggest drivers that we deal with in the North American market. The net cash receipts are the most highly correlated statistical measure to the new equipment market," Schaefer said. "The challenge there is we're looking at pretty stable net farm income this year on the back of commodities and some of the government support programs. Generally speaking, dollar for dollar, farmers don't react to government support the same way that they do grain in the bin or cash at the elevator, the river terminal."
Expectations vs. Results
From the dealer perspective, Hunt said H&R Agri-Power, which has stores in Kentucky, Tennessee, Indiana, Illinois, Mississippi and Alabama, continues to face headwinds and the dealership's wholegoods sales are down over 25% year-over-year and are off about 3-5% of budget.
"I don't look for that to change much here going into this next half of the year," he said. "Our parts sales, a little surprise here, also are seeing some headwinds there. I don't know if the fleet's new enough or not, but we're down single digits there year-over-year and single digits to our budget. We're not too far off the budget. We projected to be down some, but service sales, likewise, were the same trends in parts and service, which do not fare well with our absorption rate."
H&R has cut expenses as a result, but Hunt said that only goes so far. "I don't think we can reduce expenses to overcome the lack of equipment sales," he said, adding that it's not going to change much until net farm income increases. "The government payments have got this propped up with the $30 billion-plus they put into our farm economy that they had to keep it going."
Looking back on the first half of the year, Schaefer said New Holland was "10 or 20 basis points off of where we would've anticipated the first few months of the year, though it's not coming without its challenges.
"In spite of all of the chaos around us, I would say thanks to the strength of our dealer network in large part, we continue to push forward in the business, in the face of all of this chaos and adversity."
He said the OEM has some weak spots on a product line by product line basis on some of the lower volume large ag products. "In the core of our business for New Holland and our mid-range tractor product lineup, and of course, our hay and forage business with the strength and beef prices we've seen continued, pretty good demand there," he added.
Overall, he said business has been mostly in line with the more depressed environment they had planned for this year. From the shortline manufacturer perspective, Harthoorn echoed what Hunt and Schaefer said about the challenges in the marketplace.
"If you were lining this up as a song, I'd say this is the same song, next verse, because pretty much our results are synonymous with what Ryan's talking about, what Steve is talking about. It's been challenging," he said. "the Dealer inventory levels have been a primary cause. Of course, what's impacting dealer inventory levels is the lack of buyer interest."
Harthoorn said that even though farmers have a little bit of cash right now because of the government funding, they're not willing to open up their wallets just yet. He said maybe in the fourth quarter as the end of the year approaches, farmers will start taking advantage of some tax benefits. "Maybe we'll see a little bit of turnaround. Right now, it's definitely headwinds out there for us," he said.
Adjusted Outlook
When it comes to how the first half of the year has impacted original forecasts for 2025, Schaefer said while the industry collectively was looking to the second half of 2025 having "some light at the end of the tunnel," that has now been pushed out to 2026.
"We'll see how these early order programs roll out over the next couple months in the first 4-6 weeks of early order periods, but looking more toward next year with our eye for optimism, than the last 4-6 months of '25 as we had maybe thought."
Hunt agreed that they've had some "notable shifts" in their market from earlier forecasts. "Initially, there was quite a bit of optimism that the lower interest rates that were projected and the stable commodity prices would support the strong equipment sales; that kind of went away a little bit here. We've adopted a bit more of a cautious outlook moving forward into '25.
H&R Agri-Power is focusing on value-added precision selling, he said. "We're trying to drive business somewhere where they'll buy something. Aiming to improve operation margins and driving adoption among more customers, that's going to in turn help their operations become more efficient, profitable.
Looking ahead 6 months, Hunt said he expects the market to remain cautious, with farmers prioritizing maintenance and efficiency over new equipment purchases.
"As Ryan said earlier, it looked like there was somewhat of a light at the end of the tunnel," Harthoorn said. "We were initially projecting a little bit of light at the end of the tunnel, going into maybe the latter part of third quarter, possibly fourth quarter. That outlook has dimmed a little bit in light of the uncertainty that's brought on with the current economic conditions, particularly in light of the tariffs."
He also said that Oxbo has been putting an emphasis on getting out and partnering with its dealers and finding creative ways to help them move equipment off their lot.
"We've been talking to dealers about lease options, low-rate financing, demo programs. Whatever we need to do, we need to go out there and spend time on that farmer's yard to help them move some of that equipment, so we can get that pipeline freed up, and hopefully see things take off here towards the latter part of this year."
