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Deere & Co: Ploughing Towards Automated Farming

Deere & Co is revolutionising agribusiness with AI-Driven Smart Equipment and Analytics, driving innovation and sustainability in farming

NYSE:DE
$509.33+0.08%
Updated: Jul 01, 2025
Industrials
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Bull & Bear Case

An overview of the main reasons to invest and the key risks involved.

Bull Case

Global Reach

Deere’s trusted brand, vast dealer network, and $21.47B in international revenue position it for growth in an industry set to expand 8.5% annually through 2030.

Critical Mission

Deere’s advanced technology, precision agriculture, and autonomous machinery can assist in solving the major social challenge of feeding a growing global population.

Leading Tech Stack

Deere’s advanced tech stack, blending AI, software, and automation, powers precision farming and the path to full autonomy.

Bear Case

Cyclical Market Risks

Deere’s revenue is tied to fluctuating farm incomes, commodity prices, and construction demand, making it vulnerable to economic downturns despite efforts to diversify.

Supply Chain & Inflation Risks

Persistent supply chain disruptions and rising input costs may impact margins and delay equipment deliveries.

Tariff Exposure on Production Shifts

Trump has threatened a 200% tariff on John Deere products if it relocates production to Mexico, as announced.

Executive Summary

Trailblazer in Agricultural Technology and Innovation

Deere & Co (NYSE: DE) is a global leader in agricultural, construction, and forestry equipment, providing cutting-edge machinery and digital solutions to optimize productivity and efficiency. With nearly two centuries of innovation, Deere is revolutionizing the agricultural and construction industries through autonomous machinery, precision farming technologies, and a strong commitment to sustainability goals.

Investment Thesis

Overview of buy and sell case of the business.

Why Invest?

Key pieces of information about the business that you need to know about.

Global Reach

Deere & Co has built an iconic brand with a reputation for durable, reliable equipment, fostering deep customer loyalty. Deere has the largest dealer network across North America, with 2,288 locations. Though Deere's largest market is North America, the company has a truly global reach. In 2024, international revenue (from markets outside the U.S. and Canada) was approximately $13.3 billion (26% of total revenue) - a position of strength that will come in handy in a global agricultural equipment industry that is forecast to grow 8.5% annually through 2030.

Critical Mission

Deere & Co. is trying to solve a major future problem. By 2050, the world's population is projected to grow by more than 2 billion, reaching 10 billion and increasing global food demand by around 50%. The company’s focus on advanced technology, precision agriculture, and sustainability initiatives puts it at the forefront of the effort to address the agricultural challenges posed by global population growth. For example, Deere’s development of autonomous tractors and machinery allows for 24/7 operation, increasing the amount of work that can be done in a given period and addressing labour shortages.

Innovative Technology

Innovation is the driver of Deere’s current success and future progress. The foundation of Deere's success is its advanced tech stack, a blend of AI, software, and automation that powers precision farming and the path to full autonomy. Deere’s developments, including fully autonomous tractors and SpaceX Starlink for rural connectivity, highlight its role as a leader in AgTech 4.0.

Catalysts

The key events that could drive investment opportunities and shift markets.

Near term

Commodity Prices

Commodity prices can directly impact Deere’s business, particularly the prices of key crops like corn, soybeans, and wheat, which directly affect farmers' income, which in turn influences their ability to purchase new equipment. If commodity prices remain strong, trade conditions are favorable, and technological advancements continue to improve productivity, the outlook for farmer incomes in the U.S. is generally positive. In the U.S., the $10 billion government support (2025) for farmers will help buffer downturns, sustaining equipment demand despite market volatility.

Medium term

Technological Advancements: Deere's ongoing investment in autonomous machinery, precision agriculture, and connectivity (e.g., SpaceX Starlink for rural connectivity) is likely to drive innovation and efficiency in the agricultural sector. The commercialization of AI-powered, fully autonomous farming equipment has the potential to revolutionize agriculture by maximizing efficiency, reducing labor dependency, and optimizing resource usage.

Government Support: Increased government support for farmers, particularly in the U.S. (e.g., the $10 billion aid), may help buffer the downside risks for farmers' balance sheets, which could indirectly support Deere’s equipment sales.

Geopolitical & Trade Factors: Trade policies, tariffs, and government regulations, especially in emerging markets like Brazil, will be crucial for Deere’s growth, given its exposure to global markets.

Long term

Smart Industrial Strategy: Deere's "Leap Ambitions" strategy aims to unlock over $150 billion in incremental addressable market opportunity by delivering integrated, tech-driven solutions for precision agriculture and autonomous machinery. This could revolutionize agriculture and construction sectors by enhancing sustainability and productivity.

Global Population Growth: The expected global population increase and the corresponding rise in food demand by 2050 will likely drive a long-term need for more efficient farming equipment. Deere's focus on precision agriculture and sustainability could position it to capitalize on this trend.

Sustainability Goals: As global regulatory pressure on emissions and sustainability increases, Deere's push toward sustainable, alternative power technologies and solutions, such as electrification and hydrogen power, will shape its long-term product portfolio.

Key Risks

Key pieces of information about the business risks that you need to know about.

Supply Chain Constraints & Cost Inflation

The company faces risks from rising input costs, semiconductor shortages, and global supply chain disruptions. While Deere has strengthened its supply chain resiliency through dual sourcing and stronger relationships with key suppliers to mitigate these risks, further inflationary shocks could affect profitability.

Agricultural & Construction Cyclicality

Deere’s core markets are highly cyclical, with farm incomes, commodity prices, and government subsidies influencing demand for equipment. While the company has improved resilience through diversified revenue streams, prolonged downturns in agriculture and construction could impact earnings.

Tariff Exposure on Production Shifts

John Deere faces significant tariff risks if it relocates production to regions like Mexico. While tariff exposure remains fluid, Deere must continuously monitor the rapidly changing global trade environment and be prepared to adjust its strategy to reduce exposure.

Follow the Experts

Quickly navigate key insights from industry experts and leverage their knowledge and market intelligence.

Jim Collins profile

Jim Collins

Agriculture and Food industry expert

20k audience

Expert Insights

article
“agribusiness has a huge role to play in responding to climate change”
article
“Our job is to help farmers be more profitable, finding ways for them to use less inputs and be more efficient"
Rhishi Pethe profile

Rhishi Pethe

AgriFoodTech Writer and Analyst

9k audience

Expert Insights

article
“Deere continues to follow a software and hardware integrated technology stack for its brand, similar to Apple.”
article
"Deere obviously made a big splash at CES, and continues to roll out interesting solutions to real customer problems."
Bill Gates profile

Bill Gates

Investment and Technology

100 million audience

Expert Insights

article
"Deere is another Gates favorite...It can maximize its boom revenue periods and minimize damage in its downward revenue periods"
youtube
Bill Gates on the need for agricultural innovation
Agweb profile

Agweb

Agriculture News

80k audience

Expert Insights

article
“John Deere has announced a suite of new retrofit autonomy kits for tractors and tillage implements…The kits feature redesigned camera arrays and rugged NVIDIA processing units.”
article
“(John Deere) technology…has been run across over 1 million acres of cropland during the 2024 season, resulting in an estimated savings of 8 million gallons of herbicide mix.”
Allen Root profile

Allen Root

Associate Editor at Barron's

10k audience

Expert Insights

youtube
“Deere plans to invest in precision farming, including self-driving tractors and computers planting seeds…the company hopes to eventually reach 10% of its sales from software sales, up from 1% currently.”
Craig Rupp profile

Craig Rupp

Founder and CEO at Sabanto

5K audience

Expert Insights

article
“The graying of America’s farming population presents a formidable obstacle in adopting autonomy.”

Investor Materials

Access the most recent investor updates published by the company.

Key Investment Materials

Deere Recognized as One of the 2024 World’s Most Ethical Companies

Article

<p>MOLINE, Illinois (March 4, 2024) – Deere & Company (NYSE: DE) has been recognized as one of the 2024 World’s Most Ethical Companies® for the 17th time by Ethisphere, a global leader in defining and advancing the standards of ethical business practices.</p>

"Tech Stack"

Read Here

Article

Autonomous farming is here. Check out how John Deere’s all-new autonomous tractor and tillage system.

External Insights

A curated collection of third-party content relevant to the company and sector to help inform your investment decision.

Key Investor Materials

John Deere collaborates with Starlink to test new agriculture connectivity solutions: report

Article

John Deere is implementing an early access program to test agricultural connectivity solutions using Starlink.

Team

Meet the experienced professionals leading our organization

What the Pro's Are Asking

Here are the questions that professional investors are asking before making an investment decision.

What are the key drivers of Deere & Co's revenue and profit growth?

The primary driver of Deere’s revenue is the demand for agricultural machinery. This demand is influenced by factors such as global food production needs, commodity prices, and farm income levels. When farmers have higher income, they are more likely to invest in new equipment, driving sales for John Deere. The company also generates significant revenue from its construction and forestry division. Growth in infrastructure projects, urbanisation, and housing developments increases the demand for construction machinery, which boosts John Deere’s sales in this segment. Deere & Co's leadership in precision agriculture technology is a major growth driver. Products that enhance farm productivity, such as GPS-guided tractors, autonomous machinery, and data-driven farming solutions, attract customers looking to improve efficiency and yields.

How is Deere & Co performing compared to competitors?

Deere & Co stands as a leader in the increasingly technology-driven agricultural industry. The company retains its competitive edge thanks to a rapidly growing connected machine portfolio, a strong focus on automation and EVs, an expanding electric product lineup, and an unparalleled dealer network. In 2022, Deere & Co was the leading farm machinery manufacturer and the fourth-largest construction machinery manufacturer globally in terms of revenue. Deere’s dealership, United Ag & Turf, is North America’s largest agricultural dealer group. In particular, Deere dominates the tractor market and its 40% shipment share was the largest in the connected tractors market as of the end of 2022. Deere’s vast network of over 2,000 dealer locations across the US and Canada solidifies its competitive edge.

How is Deere & Co's doing on the ESG front?

Deere & Co's focus on sustainable products has not only improved the company’s ESG performance but is also having a much broader impact on advancing sustainable agriculture. They are doing this by providing technology solutions that improve nitrogen use efficiency, increase crop protection effectiveness, reduce CO2 emissions, and increase food production. As of 2024, Deere & Co has sustainably engaged with 160 million acres. Sustainably engaging with land aims to maximise productivity while preserving the land’s long-term health and resilience, ensuring it remains a valuable resource for future use. The company has also been recognised as one of the 2024 World’s Most Ethical Companies by Ethisphere for the 17th time, underscoring its commitment to ethical business practices. As part of its sustainability goals, Deere & Co has pledged to deliver 1.5 million connected machines by 2026, increase crop protection efficiency by 20%, and cut customer CO2 emissions by 15% by 2030.

What is Deere & Co's business model?

Deere & Co is managed through the following four business segments: production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services (John Deere Financial or FS). The Agriculture and Turf segment focuses on the distribution and manufacture of a full line of agriculture and turf equipment and related service parts. The Construction and Forestry segment offers machines and service parts used in construction, earthmoving, road building, material handling and timber harvesting. The Financial Services segment finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment.

What are the biggest challenges for the company?

Tariffs or trade agreements can impact Deere & Co's cost structure and access to international markets. For example, trade tensions between the U.S. and China have in the past affected the agricultural sector and, by extension, John Deere.

The agricultural equipment market is heavily influenced by economic factors, including commodity prices, farmer profitability, and overall demand for agricultural products. It is also a highly competitive market with numerous players vying for market share. Deere & Co's must continuously innovate and improve its product offerings to maintain its leadership position. To help scale its tech solutions, John Deere has acquired companies like Blue River and Spark AI, and most recently Smart Apply, and now has more than 3,400 engineers.