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John Deere's Financial Challenges

Sep 12, 2025

Summary

  • The article reports on John Deere’s recent financial challenges, citing a significant decline in sales and profits due to increased tariffs and struggling U.S. farmers.
  • Higher tariffs on metals have added $600 million in costs for John Deere, leading to layoffs and a shift among farmers toward purchasing used equipment instead of new.
  • The company expects a 15-20% drop in 2025 sales for large agricultural machinery, its main revenue source.
  • These issues are linked to ongoing U.S. trade policies and diminished overseas demand for American agricultural products.

Action Items

  • (No explicit action items or next steps were mentioned in the article content provided.)

John Deere Financial and Market Impact

  • John Deere reported net income down 29% from a year earlier, highlighting increasing financial pressure.
  • The company cites $300 million in tariff-related costs already incurred, with another $300 million expected by year-end, mostly from steel and aluminum tariffs.
  • As a result, John Deere laid off 238 employees at its Illinois and Iowa factories over the summer.
  • The company forecasts a 15-20% decrease in 2025 sales of large agricultural machinery.

Farmer Demand and Used Equipment Market

  • Due to rising prices for new tractors (up at least 60% in eight years), farmers who formerly purchased new now often seek used equipment.
  • Used tractor dealers, like Josh Enlow in Tulsa, Oklahoma, have noticed a customer shift toward secondhand products, driven by significant price increases—some new tractor models now cost at least $250,000 more than before.

Impact of Tariffs and Trade Policy

  • President Trump’s tariffs and trade policies are directly impacting John Deere and its customer base.
  • U.S. farmers face declining overseas demand, compounding the effects of higher equipment costs and straining the agricultural sector.

Decisions

  • No formal decisions recorded — The article only reports on company status and market conditions.

Open Questions / Follow-Ups

  • How will John Deere continue to respond to prolonged tariffs and weakening farmer demand?
  • Will further layoffs or operational changes occur if current trends persist?
  • What policy changes, if any, are being considered to support U.S. manufacturers and farmers in this environment?