Deere Forecast Misses Expectations as Farm Slump Deepens
Low Crop Prices and Tariff Uncertainty Weigh on 2026 Outlook
Key Takeaways:
- Deere projected fiscal-year net income of $4 billion to $4.75 billion, falling short of expectations and sending shares down before New York trading.
- The outlook reflects continued pressure from low crop prices, tariff-related costs and uncertainty around a U.S.-China trade deal that has slowed farm equipment spending.
- Deere said the large agriculture market may not bottom until 2026, leaving farmers and manufacturers waiting for clearer trade terms and firmer demand.
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Deere & Co.’s first profit outlook for the year ahead fell short of expectations as uncertainly continues to surround the timing for a recovery in the U.S. farm economy.
The world’s biggest farm machinery maker said net income in the fiscal year beginning in November will be between $4 billion and $4.75 billion, below the average Bloomberg estimate for $5.31 billion.
Shares fell by as much as 6.3% before the start of regular trading in New York.
The weak outlook for the maker of iconic green and yellow tractors comes as farmers have been hit hard by low crop prices and President Donald Trump’s tariff policies. Despite a recent deal between the U.S. and China to boost shipments of American crops to Asia, there’s still questions on whether the sales will be enough to shake the U.S. farm economy out of a yearslong slump.
Rival manufacturer CNH Industrial NV earlier this month pointed to “ambiguity” on the terms of the trade deal, which leaves the sector with a lack of certainty on how it may benefit farmers in a way that would get them to spend more.
“Looking ahead, we believe 2026 will mark the bottom of the large ag cycle,” CEO John May said in a statement.
Deere estimated 2026 sales for its large agriculture segment — which caters to the biggest farmers of crops such as corn and soybeans — to be down 15% to 20% in the U.S. and Canada. South America is seen flat for tractors and crop-cutting combines.
The company reported increased fourth-quarter sales due to both higher shipments and prices, but operating profit decreased due to elevated costs linked in part to tariffs. Deere in August said tariffs such as those on U.S. imports of steel and aluminum cost the company$600 million.
Many in the industry believe China’s resumption of U.S. crop imports as well as aforthcoming aid packagefor American farmers should be a help in 2026. The Asian country has purchased nearly 2 million tons of U.S. soybeans since Oct. 30.
However, Chinese officials have yet to confirm details of a trade accord with the U.S. That has created further uncertainty for farmers as they plan out next year’s planting decisions and equipment orders.
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