How Equipment Dealer Groups Can Weather the Storm Blog Image

How Farm Equipment Dealer Groups Can Weather the Storm

How Farm Equipment Dealer Groups Can Weather the Storm

The agricultural industry experienced significant shifts in 2024, particularly when it comes to purchasing farm equipment. With economic pressures, rising interest rates, and changing farming practices, many farmers are rethinking their buying decisions. This decline in farm equipment purchases has posed a considerable challenge for dealerships that rely on equipment sales to sustain their business. However, these same challenges present opportunities for dealerships to adopt creative marketing strategies to maintain and even grow their market share.

In this Root+Beta Insight, we will explore the key reasons behind the decline in farm equipment purchasing in 2024, examine the impact on farm equipment dealerships, and suggest actionable marketing strategies that can help dealerships improve sales during this downturn.

The Decline in Farm Equipment Purchasing in 2024: Key Factors at Play

Several factors are contributing to the decline in farm equipment purchasing in 2024, each of which has a unique impact on farm equipment dealerships.

1. Economic Pressures and Inflation
One of the most significant factors driving the decline in equipment purchases is the broader economic environment. As of 2024, inflation rates remain high in many regions, driving up the cost of agricultural inputs like fuel, fertilizers, and labor. For example, the U.S. inflation rate peaked at 9.1% in 2022, and although it has since moderated, inflationary pressures continue to affect the cost of farming operations in 2024. These higher costs have left farmers with less disposable income to invest in new machinery.

According to the Agricultural Equipment Market Report by Grand View Research, the global farm equipment market saw a decrease in growth in 2023, and it’s expected to grow at a slower rate of just 4.5% annually over the next five years, down from previous growth rates of 6-8%. This shift reflects the reluctance of farmers to make large capital expenditures when the financial outlook is uncertain.

2. Rising Interest Rates and Financing Costs
Another critical issue for farmers is the rise in interest rates. In 2024, the Federal Reserve has kept interest rates higher to combat inflation, which has made financing farm equipment more expensive. According to the Farm Equipment Manufacturers Association (FEMA), 2024’s interest rates on equipment loans are expected to rise by an average of 1.5-2.0% compared to the previous year. This increase in financing costs discourages farmers from making significant capital investments.

Farmers are particularly sensitive to interest rates because many depend on financing to purchase new machinery. The U.S. Department of Agriculture’s (USDA) 2023 Farm Income Forecast notes that more than 70% of U.S. farms carry some form of debt, and higher borrowing costs put additional strain on their ability to invest in new equipment.

3. Extended Equipment Lifecycles and Technology
Advances in farming technology and equipment durability have led to longer equipment lifecycles. Tractors, harvesters, and other machinery are designed to last longer, and with fewer breakdowns and higher efficiency, farmers are extending the use of their current equipment. In fact, according to a 2023 report by Ag Equipment Intelligence, the average age of tractors in use in the U.S. has increased from 6.4 years in 2010 to over 8.5 years in 2023. With equipment lasting longer, the urgency to replace or upgrade machinery is diminished.

Moreover, as technology becomes more integrated into equipment, farmers may choose to update specific components (like GPS systems or automation features) rather than purchase entirely new machines. This shift toward “upgrades over replacements” presents a challenge for dealerships that typically rely on high-ticket sales of new machinery.

4. Uncertainty in Agricultural Markets and Climate Change
Fluctuating commodity prices and the increasing unpredictability of crop yields are also influencing purchasing behavior. With unpredictable weather events, rising costs, and supply chain disruptions, many farmers are cautious about making big-ticket purchases. For instance, crop price volatility, as seen in recent years, makes it difficult for farmers to forecast consistent profits, which in turn discourages them from investing in expensive machinery.

According to the World Bank, global agricultural commodity prices were forecasted to decrease in 2024, impacting farm revenues. This uncertainty makes large equipment purchases less appealing, particularly for smaller-scale operations that might have less financial flexibility.

How Dealerships Can Improve Sales Despite the Decline

While these factors may seem daunting, farm equipment dealerships can respond strategically to boost sales and maintain customer loyalty. By adopting the right marketing approaches, dealerships can better align with farmers’ needs in the face of economic and market pressures.

1. Enhance Digital Marketing Efforts
Farmers are increasingly turning to the internet to research equipment before making purchasing decisions. A study by AgFunder found that 60% of farmers begin their buying journey online, using websites and social media to compare prices and read reviews. Dealerships that fail to establish a robust online presence risk losing out on this growing segment.

To capitalize on this trend, dealerships should focus on enhancing their digital marketing strategies:

SEO and Content Marketing: Search engine optimization (SEO) is essential for helping potential customers find your dealership when they search for equipment-related queries. Target local keywords like “farm equipment near me” or “tractor sales in [state]” to attract geographically relevant traffic. Content marketing, including blog posts on topics like equipment maintenance or the benefits of new technologies, can also help establish your dealership as a thought leader in the industry.

Pay-Per-Click (PPC) Advertising: Running targeted PPC ads through Google and social media platforms like Facebook can help dealerships capture immediate interest. For instance, paid campaigns that focus on “limited-time offers” or “low-interest financing” can motivate potential buyers to take action quickly.

Social Media Engagement: Facebook, Instagram, and YouTube are highly effective platforms for visual marketing. Showcasing equipment in action through videos or posts, running live Q&A sessions, or offering virtual tours of your showroom can help engage farmers who prefer to interact with businesses digitally. Additionally, farmer-focused social media groups or pages can be an excellent avenue for direct outreach.

2. Offer Flexible Financing and Leasing Options
Given the economic challenges, many farmers are looking for ways to finance their purchases more affordably. According to a 2024 report by Farm Credit (a leading agricultural lender), nearly 50% of farmers consider financing options when purchasing equipment, and many prefer lease-to-own agreements over outright purchases. Offering financing options with low interest rates, deferred payments, or flexible leasing terms can make a significant difference in attracting buyers.

Dealerships can work closely with lenders to develop financing packages that suit farmers’ specific needs. Promoting these options in marketing materials—such as emails, website banners, or direct outreach—can help alleviate the financial burden for buyers.

3. Strengthen the Used Equipment Program
As farmers increasingly turn to used equipment due to budget constraints, dealerships must be proactive in promoting high-quality pre-owned machinery. According to Ag Equipment Intelligence, used equipment sales in North America are expected to account for over 40% of all farm equipment transactions in 2024. Dealerships that can establish a strong used equipment program, offering certified pre-owned machinery with warranties and maintenance options, will stand out in a competitive market.

Effective strategies for promoting used equipment include:

Dynamic Advertising: One of the first agencies in the country to offer this service, Root+Beta partners have seen incredible success in advertising used equipment listings dynamically through paid social, search and more. Check out our recent case study on how it drove incredible growth for one of our partners.

Dedicated Used Equipment Web Pages: Create a separate section on your website specifically for used machinery, where customers can easily browse available equipment, see detailed descriptions, and access transparent pricing.

Trade-In Programs: Encouraging customers to trade in their old equipment for discounts on new or used machinery can also drive sales and build long-term relationships.

4. Focus on After-Sales Service and Support
Providing excellent after-sales service can help build trust and ensure customer satisfaction, encouraging repeat business. Farmers are more likely to purchase from dealerships that offer reliable support for repairs, parts, and maintenance.

Dealerships should emphasize their maintenance services, parts availability, and extended warranties in their marketing materials. Additionally, offering value-added services like training sessions on how to operate or troubleshoot equipment can be a key differentiator.

5. Emphasize Total Cost of Ownership (TCO) and ROI
Farmers are highly focused on the bottom line, so dealerships should shift the focus of their marketing away from just the sticker price and toward the total cost of ownership (TCO) and return on investment (ROI). Highlight how your equipment can reduce operating costs through fuel efficiency, productivity, or longevity. This type of messaging speaks directly to farmers’ concerns about profitability and makes the case for the long-term value of investing in quality equipment.

Conclusion

The decline in farm equipment purchasing in 2024 is undoubtedly a challenge for dealerships, but it’s also an opportunity to pivot and adapt to changing market conditions. By embracing digital marketing, offering flexible financing, developing a robust used equipment program, and emphasizing after-sales support, dealerships can position themselves as trusted partners to farmers facing economic uncertainty. Additionally, focusing on value, ROI, and customer relationships can help establish long-term loyalty, ensuring that dealerships not only survive the downturn but thrive in a changing agricultural landscape.

With the right strategies in place, farm equipment dealerships can weather the storm in 2025 and beyond, emerging as key players in the evolving agricultural industry.

About Root+Beta

From global brands to local farms, Root+Beta builds authentic relationships & create powerful business outcomes. We don’t just talk-the-talk – we’re deeply rooted in the agriculture industry & built by people just like you. Crafters of bold strategies that deliver, we move fast, test what works, and pivot when necessary. Our approach is data-driven so every decision is backed by insights and made to maximize your marketing investment.

www.rootandbeta.com

howdy@rootandbeta.com