Combine Sales Down 13%, Small Tractors Down 12%: CNH Calls 2026 the Bottom and Sells Construction Arm to Kobelco

The farm equipment slump is not over, but the maker of Case IH and New Holland machines says it can see the bottom. CNH Industrial reported third-quarter results on Nov. 9 showing another drop in North American tractor and combine demand, and in the same breath announced it will hand control of its construction equipment arm to Japan’s Kobelco Construction Machinery to focus almost entirely on agriculture.

Here is what the numbers say and what they mean if you are shopping for iron this winter.

Demand is still falling, just more slowly

CNH’s figures describe the whole industry, not just its own brands, which makes them a useful read on the market. In North America, the company said, industry sales volume in the July-September quarter was:

• Tractors under 140 hp: down 12% from a year earlier
• Tractors over 140 hp: down 5%
• Combines: down 13%

South America was weaker, with tractor demand off 22% and combines off 19%. Europe, the Middle East and Africa slipped 4% for tractors and 3% for combines, CNH said.

CNH’s agriculture net sales fell 2% to $2.9 billion in the quarter. Company-wide revenue of $4.35 billion was roughly flat. Reported net income dropped to $35 million from $67 million a year earlier, which CNH tied largely to a $156 million non-cash tax charge in its Brazilian finance unit. Adjusted net income rose to $205 million from $109 million, helped by $109 million in IEEPA tariff refunds booked in the quarter.

Dealer lots are being cleared

For farmers, the more practical numbers involve inventory. Dealer stocks were already down by over $100 million by the close of the third quarter, and CEO Gerrit Marx told analysts he expects them to shrink by “another $150 to $250 million in the fourth quarter,” Michigan Farm News reported from the investor call.

Marx said order intake for model-year 2027 machines in North America has matched expectations, which gives the company “the confidence to say that 2026 will be the trough of the cycle for the North America region,” according to the same report. CNH said it used part of its tariff refunds on time-limited efforts to clear aged inventory, and that ag production hours fell 11% in the third quarter.

CNH also flagged stress among borrowers. Receivables more than 30 days past due rose to 4.1% of the total at the end of September from 3.5% a year earlier, which the company attributed to economic pressure on farmers, especially in South America.

The Kobelco deal: what changes and what doesn’t

CNH will sell a 70% stake in its construction business to Kobelco, a unit of Kobe Steel, in a joint-venture deal valued at $1 billion, AgNavigator and Michigan Farm News reported. CNH expects about $700 million in cash, earmarked for paying down debt, and keeps a 30% stake. Closing is expected by the end of 2027, pending regulatory approvals.

For farm customers, CNH said:

• Case IH, New Holland, STEYR and the Raven precision platform stay with CNH.
• CNH ag dealers will still be able to sell construction machines supplied by the joint venture, which matters for farms that buy construction machines from the same dealership.
• CNH Capital, the company’s financing arm, stays part of CNH.

What it means if you’re buying

None of this changes the sticker on a specific machine, but it shapes the bargaining environment:

• Aged inventory is the leverage point. CNH says it is spending to move older units and wants channel stocks “at healthier levels” before 2027. Ask dealers what model-year 2025 and 2026 units remain and what programs apply to them before year-end.
• The window may narrow. If inventory falls as CNH projects, there may be fewer leftover units to choose from by spring. Compare that with used values, which have been firming; see our look at October auction values for tractors and planters.
• Construction equipment support. If you run Case or New Holland construction equipment, the deal won’t close until late 2027. Ask your dealer how parts and warranty support will be handled once the joint venture takes over.
• Tax timing. A purchase before Dec. 31 may matter for depreciation; our year-end tax planning guide covers the 2026 limits. Talk to your tax adviser before buying for tax reasons alone.

CNH’s report follows Deere’s recent moves to recall laid-off workers and add hiring in Iowa and Illinois, as major full-line makers adjust output to weaker farm demand.