In this episode of On the Record, brought to you by Associated Equipment Distributors, we report on the impact rising diesel prices are likely to have on farm margin and equipment demand. In the Technology Corner, Noah Newman shares an up-close look at AgZen’s RealCoverge AI powered precision spraying technology. Also in this episode, Fendt increases its focus on North American Growth and manufacturers report that equipment demand is increasing. 

   Associated Equipment Distributors

This episode of On the Record is brought to you by Associated Equipment Distributors — the leading association in North America for the equipment distribution industry.  

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Record Diesel Prices Pressure Farm Margin

The average price of U.S. diesel reached a new all-time high of $5.94 a gallon on Wednesday, up 4 cents from the prior record set Monday, according to AAA. That puts prices up 61% from a year ago, reports Agri–Pulse.

Kim Chipman with Agri-Pulse says “Ag economists are predicting another downturn for key crops this year as Congress struggles to get billions of dollars in federal aid to growers on top of roughly $12 billion in payments from the Trump administration.”

USDA raised its forecast for 2026 farm earnings last week, citing high receipts for key crops and government payments. However, renewed attacks between Iran and the U.S. are pushing up fuel prices. The volatility, Chipman says, is making it tough for ag producers to hedge against high fuel costs. 

AgroLatam’s Emily Trask reported that “fuel is one of the most visible farm expenses because producers purchase it directly, but the actual economic impact extends much further.”

“Diesel is embedded in fertilizer delivery, grain hauling, livestock transportation, custom harvesting, machinery services and nearly every stage of agricultural logistics. When diesel prices rise, farmers can pay twice: first through their own equipment and again through higher freight and supplier charges,” Trask reported. “That multiplier effect can raise total input costs even for operations that have already contracted or hedged part of their on-farm fuel requirements.”

The outlook for lower diesel prices doesn’t look good. On September 9, the Department of Energy raised its forecast for U.S. diesel prices in 2027 as tight global supplies keep domestic inventories unusually low. 

The latest Energy Information Administration outlook expects retail diesel to average $4.40 a gallon in 2027, up 8.2% from its previous forecast of $4.07. EIA also raised its 2026 forecast 22 cents to $5.07 a gallon.

Energy Information Administration Graph.jpg

Dealers on the Move

This week’s Dealers on the Move are Splintered Oak Equipment and Acme Equipment.

Texas New Holland dealer Splintered Oak Equipment has acquired WC Tractor’s 3 New Holland locations. WC Tractor divested its New Holland stores to focus on its Kubota business. 

Acme Equipment opened a 13,104 square foot facility in Bismarck, N.D. that features a Kubota showroom and houses Acme Rents.  

Over 260 Dealers Invest in New Precision Spraying Technology 

We got an up-close look at AgZen’s RealCoverage precision spraying technology at the Farm Progress Show last week in Boone, Iowa. 

The AI-powered technology has been picked up by over 260 dealers this year, including AgRevolution, AgriVision, PrairieLand Partners and Sloan Implement to name a few. Let’s check out how it works. 

“AgZen is a startup and our main product is this blue box here called RealCoverage. It’s the first and only unit that tells you exactly how much coverage you’re getting on your leaves as you’re spraying. Hundreds of parameters you’ve got going through your field between your psi, weather, adjuvants, how fast you’re driving, etc. We can actually tell you how much coverage you’re getting on your leaves and we give you recommendations to improve that coverage. Maybe if your coverage isn’t that great we’ll say ‘hey bump up your psi or maybe try a different adjuvant,’ whatever it is to help you get better coverage while spraying less. Here we have this demo unit. We’ll give it a spray. On this screen, this is exactly what you’d see in the tablet in the cab. So, you can see in real time, which leaves are getting that coverage and you’ll see the coverage over time as you’re driving through the field.” 

Catch the full interview about the latest AgZen developments with Josefina Corripio on PrecisionFarmingDealer.com. 

Commodity Ticker 

As of  September 9 corn prices were $5.33, up 33 cents from our last episode. Soybeans closed at $13.16, up88 cents. Wheat closed at $7.47, up 62 cents and Class III milk prices closed at $16.19 down $0.21. 

Commodity Ticker .jpg

Fendt Focuses on North American Growth 

During a Farm Progress Show press conference aimed at the foreign press, AGCO leadership stressed its focus on growing the Fendt brand in North America. 

Stefan Caspari, senior vice president of customer success and North American ag, said that since AGCO introduced Fendt in North America 5 years ago, the company has invested $85 million in its dealer network in the region. 

He says today Fendt dealers cover about 80% of large ag in North America. There are 75 dealer groups with 275 locations, and the network is growing, he says. 

“But the story doesn't end here and there's actually a different story to that. We don't believe that we will win with brick and mortar. Brick and mortar is a high investment for our dealers and it still requires the farmer to come to the dealership. In North America, we actually address it in a different way. See the different map here with many more dots on it.”

“These are all parts locations and service trucks that we want our dealers to have in order to serve the area and serve the farmers. In fact, these dots are three times more than the dots on the previous page. That means there are three times more touch points that you as a fend farmer, as a fend customer have in order to get support from your machine. We require every dealer from us to invest into on-farm capabilities, which is basically service trucks and these parts drop boxes. So service trucks, as some of you have seen yesterday at Hagnet Farms, big service trucks, they have a crane, they have all the equipment that you need in order to service or repair a machine. It's basically a dealership on wheels. And these kinds of dealers bring that service to the farm.”

AGCO introduced the Farmer Core initiative, which is focused on delivering “an exceptional next generation farmer and dealer experience built on 3 pillars — the on-farm mindset, smart network coverage and digital customer engagement.” 

Farmer Core initiative.jpg

It is an end-to-end distribution model designed to meet the changing needs of farmers around the world, bringing the dealer experience directly to the farm. The on-farm model positions dealers to meet their customers' needs at every stage of the ownership journey. 

AGCO uses a net promoter score to measure customer satisfaction, and Caspari says dealers applying Farmer Core have a 4.5 higher net promoter score of customer satisfaction that results in better market share. Dealers that are applying Farmer Core have a 1.5% better market share in their areas than dealers who aren’t applying to that level yet. 

Equipment Manufacturers See Equipment Demand Improving

During the Farm Progress Show in Boone, Iowa, AEI spoke with executives from farm equipment manufacturers who shared their farm equipment business outlook for the remainder of the year and going into 2027. We also asked them what, if any impact dealers can expect, from recent U.S./Canadian tariff announcements. 

Three items stood out.

  • Inventories are normalizing and aging fleets are signaling a sales rebound for 2026-2027
  • Sales focus needs to pivot to efficiency metrics and ROI of precision ag technology
  • Most manufacturers are building to demand but monitoring tariffs closely

 Bill Erickson, vice president of sales at Kinze, says the good news is Kinze’s inventory in the field is getting sold.

“We’re not really competing against ourselves as we go into model year 2028 machines. But sales are relatively flat right now as expected, but with a hint of optimism. Quoting activity is through the roof. There is a lot of interest in our machines. I think this year will be flat. Next year we’ll start rising and following model year 2029, I think we’ll be in a very positive situation.”

AGCO CEO Eric Hansotia noted that farmers are looking to make purchases.

“The dealers have enough inventory, and the farmers are wanting to buy. They’re seeing these higher grain prices, and they’re starting to sell out of the bins and getting some income because it’s the biggest increase this last month is the biggest price increase they've seen since 2012. There are all sorts of new farming problems being solved on the lot and their fleets are aged. They’re about the oldest they’ve been. We’re bullish on the back part of this year and into next year. We think in this market, farmers are seeing a recovery.”

Hansotia said impacts from recent tariffs have yet to materialize for AGCO. 

“We’re really hoping that it gets sorted quickly. This kind of thing just throws sand in the gears, and we’d really like to have a free flow of things. We’re hoping both sides can come together quickly. If they don’t, it will be a bit of a hindrance for our farmers primarily in Canada because we produce a lot of products in the U.S. that can shift up to Canada, sprayers and hay equipment and tractors, planters. We’re wanting to get those products to those farmers at the lowest possible cost.”

We’ll have more from our Farm Progress Show interviews in the September issue of Ag Equipment Intelligence. 

DataPoint: U.S. Manufacturers’ Inventories of Farm Machinery & Equipment

This week’s DataPoint is brought to you by the Precision Farming Dealer Summit, returning to Indianapolis January 11-12. To learn more and to register, visit PrecisionSummit.com.

 U.S. Manufacturers’ Inventories of Farm Machinery & Equipment.jpg

Manufacturers serving the U.S. market remain cautious about production as they work to bring dealer inventories into balance with demand. AGCO, CNH and Deere have all reported lower production hours and a focus on balancing production with demand.

According to an August 28 farmdoc report, alongside these production adjustments, inventories held by U.S. farm machinery and equipment manufacturers have declined substantially from their 2022 peak.

U.S. farm machinery and equipment manufacturing inventories totaled $5.62 billion in June 2026 on a seasonally adjusted basis, approximately $1.6 billion, or 22.2%, below their October 2022 peak of $7.23 billion. However, the inventory drawdown has slowed, with inventories remaining near $5.6 billion in recent months.

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