A read across spring 2026 earnings calls and conferences from AGCO, John Deere, CNH Industrial, Titan Machinery, Lindsay Corporation, and Valmont Industries.
Index:
2026 is the bottom, but the recovery into 2027 looks slower and shallower than past cycles
Precision ag updates and take rates
AI Emphasis
Regional variance remains wide
Margins and the trough
Inventory Improving
Tariff Impact
E15
Tractor Sales by Segment Views
2026 is the bottom, but the recovery into 2027 looks slower and shallower than past cycles
Every major OEM that reported this spring landed on a similar timeline for the cycle. Where they differ a bit is conviction about the slope of the recovery and how much of it will arrive in 2027.
Deere CFO Brent Norwood stated that:
"Our baseline view remains that 2026 will represent the bottom of the ag cycle. We've managed field inventories tightly of new equipment and made significant progress on used. And all the while, machine hours continue to accrue, aging out the fleet and driving a base level need for replacement,"
Deere’s IR Director, Josh Beal, reinforced it with:
"What I would tell you is what we've seen thus far, and you don't want to extrapolate too much into this, just given it's early, but everything we've seen thus far would support our view that 2026 still marks the bottom of the ag cycle... As we look to the setup of recovery, our expectation still as a baseline that Brent mentioned earlier, is that we see recovery in 2027."
AGCO’s CFO Damon Audia shared a similar view with some background logic at the J.P. Morgan conference:
"When you look at the age of the fleet, when you look at the industry downturn here, we start to see this being the trough year and then an improvement next year. To your point, grain prices are ticking up, we know farmers, especially here in North America, had some record yields. A lot of them stored their grain. So starting to monetize corn right now relative to where it was earlier this year is not too bad for them”
CNH came in with more caution about the depth and duration of the trough, though. CEO Gerrit Marx said:
"We are now passing through what we expect to be the lowest period of the current ag industry cycle, supported by some replacement demand"
He sees a structural change to the Brazilian piece of the cycle:
“Brazil, if you look back the last 40 years, Brazil had always a very quick ramp to a peak year, and then it dropped quite sharply and it stayed there for a few years before it came back... What is a little different this time is that a few things come together, and like tariffs and the global trade and the new position of China when it comes to purchase global commodities and North and South American frictions. And I think that causes a little deeper and a little longer trough in this cycle than in prior cycles."
Marx did share a more direct statement, too:
"2027 will be probably a better year than 2026."
Any '27 inflection is based on the assumption that replacement demand is built up by an aging fleet, which AGCO stated as well. CNH’s Marx again:
"We have 2.5 season or 2.5 harvests in South America on many acres down there, given the climate conditions that points at our machines aging 2.5x faster when it comes to hours on the machine than in other geographies that have only one harvest... that will point at a replacement demand across large ag equipment that becomes quite relevant as we enter into '27 and '28. So I think replacement will provide a floor."
Titan Machinery, the largest Case IH dealer in North America, has not reported yet, however, their late March earnings call did shed some light on timing dynamics they see. CEO Bryan Knutson says that the structural drag will persist into next fiscal year:
"Commodity prices remain low for most growers, which continues to be the fundamental issue facing the industry. When you add in persistently high interest expense, increased input costs and limited government support, we expect many growers to remain conservative in 2027 in terms of their equipment purchasing decisions."
The Titan commentary illustrates that “bottoming” and “recovering” are very different things.
One last comment to emphasize that the bottom is near, but strong recovery may still take some time comes from Titan Machinery CFO Bo Larsen:
"North America industry volume down 15% to 20%, what does that really mean? Well, calendar year '25, industry volume on the major categories that help drive our business was already 10% lower than the trough in calendar years '15 and '16. And so this year, if you assume that down 15% to 20%, we're talking about industry volume 25% lower than the prior trough."
He repeated it for emphasis later: down 15% to 20% "implies the lowest level since the 1970s."
The Iran conflict is remains a wild card. From AGCO:
"The big question mark on the speed of the recovery, I think right now is sort of sitting with the backdrop of what's going on with the war, how that's affecting fuel prices for the farmers, how it's affecting fertilizer prices for them who are going to have to buy coming up in the back half of the year? What decisions do they make? So do they incur more cost to buy the same amount of fertilizer? Do they reduce the fertilizer purchase, which likely compromises yield, which may then drive prices up even further in 2027."
Precision ag updates and take rates
Among the macro headwinds, precision ag is the one consistent area where the manufacturers are reporting forward momentum on adoption improvement.
Subscribe to Upstream Ag Professional to read the rest.
Become a paying member of Upstream Ag to get access to this post and other subscriber-only content.
UpgradeA Professional Membership Delivers:
- Subscriber-only insights and deep analysis plus full archive access
- Audio edition for consumption flexibility
- AskUpstream Access, the LLM for serious agribusiness professionals
- Access to the Report Hub and Visualization Hub
