A Deep Dive With Ag Economist Wes Davis on the 2027 Ag Outlook

Our fall market webinar with Wes Davis, Chief Ag Economist at Meridian Ag Advisors, drew more dealer and lender questions than we could get to within an hour. So Andy Campbell brought Wes back for part two. Recorded the day after the 2026 midterm elections, this conversation covers the rest of those questions and adds a first look at what the election could mean for ag.

Missed the webinar? Watch the fall 2026 market webinar on demand, then download the Equipment Dealer or Ag Lender Playbook for a condensed version of the key takeaways and actionable tips heading into 2027.

Corn, rates, and tariffs 

Wes sees a more positive story for corn as the stocks-to-use ratio tightens from the 12%-15% range toward 9%-10%, driven by smaller Latin American crops and higher ethanol use. On rates, he points to Fed projections suggesting a possible increase around December or January. On tariffs, he notes that roughly 75%-80% of costs have been passed through to final goods. Even if trade pressure eases, he expects lost export share to erode rather than fully return, as it did after the 2018 trade war.

Inputs, cattle, and land

Input company margins sit close to 2018 levels, which tells Wes that higher fertilizer prices reflect rising costs along the supply chain, not price gouging. In cattle, drought and forage availability remain the biggest barriers to herd rebuilding, and imports aren't enough to move national prices. Land values look flat to slightly declining across three different data sources, but Wes sees nothing resembling the 1980s collapse.

Why used values held up

Wes offers three hypotheses for 2026's resilient used prices: used is taking a larger share of demand, farmers are running equipment longer, and aftermarket tech can bring older machines up to speed. Andy adds tight supply and a growing gap between new retail and used prices. Don't expect new prices to fall, though. As Wes puts it, prices "rise like rockets and fall like feathers."

Where the opportunity is

Almonds and apples are bright spots, cotton and rice still carry scar tissue, and corn and soybeans hinge on exports and renewable fuel policy. Both agree that dealers can't change their geography, but they can diversify their customer segments and look harder at micro markets.

What the election results could change

Wes closes with what to watch in the near term: A farm bill that could wrap up by December, renewed pressure on tariff policy, federal scrutiny of equipment manufacturers, and state-level action on E15 and water quality.

Key Takeaways

• Tightening stocks-to-use gives corn more upside potential than in recent years.
• A rate increase around December or January is possible, adding pressure on new equipment financing.
• Higher input prices largely reflect pass-through costs, so don't expect big swings in fertilizer.
• Land values look flat to slightly declining, not collapsing.
• Longer ownership cycles, aftermarket tech, and tight supply are supporting used values.
• When profits improve, most farmers pay down debt first, and they typically buy used before new.
• Diversifying customer segments is one of the best hedges a dealership has against regional risk.

About the Guest

Wes Davis is Chief Ag Economist at Meridian Ag Advisors, where he works with dealers, lenders, and agribusinesses to understand the economic forces shaping farm income, land values, and equipment demand.

About the Host

Andy Campbell is the host of Beyond the Hood with Tractor Zoom, delivering insights on the trends, data, and decisions shaping the ag equipment landscape.

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