DECATUR, Ill. — Danny Bradshaw climbed out of a New Holland tractor Wednesday morning impressed but already certain he wouldn't spend the more than $200,000 necessary to buy all that horsepower and high-gloss blue paint.
Corn and soybean prices have fallen from record highs, and the U.S. Department of Agriculture predicted last week that farmers' income will drop 38 percent this year. Bradshaw, like many farmers, is being cautious.
"I bought things back when prices were up a little bit," said Bradshaw, who farms at Holcomb in the Missouri Bootheel. "Right now, we're just probably holding on."
Even with drops in crop prices and the recession, sales of tractors, combines and other farm equipment in North America have been relatively strong, helping manufacturers like New Holland and Deere and Co. weather sharp drops in sales overseas. Exports of American-made farm equipment fell 20 percent during the first six months of the year, the Agriculture Department reported.
But now farmers in the U.S., already uneasy with their finances, also may be scaling back. Deere and Co. last month projected its equipment sales, farm and otherwise, would be down 21 percent this year.
Many who wandered the annual Farm Progress Show this week said they're more interested in looking than buying. The trade show held alternately in Illinois and Iowa draws tens of thousands of people.
Farm equipment makers had been riding their customers' highs for several years.
Corn and soybean farmers in particular took advantage of record crop prices to replace old machinery and move into new, more efficient tractors and combines that routinely cost $150,000 and more.
Even now, sales of combines in North America are up 30 percent over a year ago, according to July figures from the Association of Equipment Manufacturers, a trade group for farm and construction machinery makers. Even tractor sales, which were down 17.8 percent in July from a year earlier, remain relatively good after having dropped from all-time highs, said Charlie O'Brien, a vice president with the association.
"The high horsepower tractors, four-wheel drives, 100 horsepower and above, those are still doing very well," O'Brien said as farmers looked over tractors just behind him Wednesday.
Most of the sales drop, he said, has been in smaller tractors used by farmers with no more than a few hundred acres and likely farming part-time.
"Those sectors primarily follow consumer confidence in the overall economy," he said.
That larger equipment sales have held up is unusual, according to Eli Lustgarten, an analyst with Longbow Research in Cleveland, Ohio, who follows Deere & Co. and other heavy equipment makers.
When crop prices drop, as they have over the past year, farmers usually cut spending on equipment first. This time, though, farmers are cutting spending on fertilizer, chemicals and other products because those prices are very high.
Farm equipment makers can't count on that to last, Lustgarten said. But he also noted that farmers and equipment makers have been through worse times.
"The farmer is not bleeding," he said. "This isn't like the 1980s."
Still, a lot of farmers at the trade show Wednesday weren't sure enough of that to spend big money on equipment.
"I'd say there's maybe 20 percent looking to buy and 80 percent looking," said Wayne Deters, who has a small farm in Neoga in eastern Illinois and works at a farm-equipment dealership. "It's started to slow down at the dealership where I work."
Bradshaw sees no need to rush to buy.
He has two nine-year-old tractors that he uses on his 2,000 acres of corn, soybeans and wheat. They work fine, he said, but have little trade-in value. And if they need to be replaced, he said, "we would probably do something used."