stockrowWhat it does
Deere & Company makes equipment used to grow crops, maintain land, build roads, move earth and harvest timber. Its customers range from large crop growers to livestock producers, property owners, construction contractors and forestry operators. Deere also provides financing, parts, maintenance support and technology for its machines.
The company operates through three equipment businesses and a financial services business. Production & Precision Agriculture makes large tractors, harvesters, planters and sprayers for production-scale farms. Small Agriculture & Turf serves smaller farms, dairy and livestock operations, and customers maintaining lawns, golf courses and other property. Construction & Forestry makes equipment for earthmoving, roadbuilding and timber harvesting.
Deere combines machinery with technology that helps customers manage work and equipment. Its John Deere Operations Center connects owners, managers and dealers to machines in the field, providing information such as location, use, performance and maintenance needs. Deere also sells parts and precision upgrades for equipment already in use.
Founded in 1868, Deere is headquartered in Moline. John C. May is its chairman, chief executive officer and president. Deere had approximately 73,100 employees at the end of fiscal 2025.
How it makes money
Deere earns equipment sales from its agriculture, turf, construction and forestry businesses. Its production agriculture products include large tractors and harvesting equipment, as well as machinery for preparing soil, planting and applying crop treatments. Its smaller agriculture and turf range includes compact tractors, hay and forage equipment, mowers and utility vehicles. Construction and forestry products include excavators, loaders, roadbuilding machinery and timber-harvesting equipment.
In fiscal 2025, Production & Precision Agriculture accounted for 45% of equipment operations net sales. Deere sells equipment largely through dealers, although its roadbuilding business also sells directly to retail customers in some markets. Sales vary with the timing of planting, harvesting, construction and other customer activity. Deere offers early order programs for some farm equipment, with incentives for customers who order before the season of use.
The business continues to serve machines after their initial sale. Deere supplies replacement parts, including proprietary parts, and offers maintenance and repair contracts, warranty extensions and precision upgrades. Its connected-equipment services provide alerts and information to support maintenance and repairs. These activities create opportunities for revenue during the life of equipment, although the company does not provide a recurring-revenue total in the information presented here.
John Deere Financial finances retail equipment purchases and leases, provides revolving charge accounts, and finances dealer inventories. These arrangements generate financing income and support equipment sales. Some retail finance charges are reduced or waived during promotions, with the associated cost reflected in equipment net sales.
Customers and how it sells
Deere serves large-scale growers of crops including corn, soy, small grains, cotton and sugarcane. It also sells to dairy and livestock producers, smaller and specialty crop growers, turf and property-maintenance customers, construction contractors and forestry operators. Agricultural buying decisions depend on factors including commodity prices, farm input costs, financing conditions, weather and the availability of used equipment.
The majority of Deere’s sales occur in the U.S. and Canada. Its agriculture and turf sales and marketing organization also covers Europe, the Commonwealth of Independent States, Latin America, South America, Africa, Asia, the Middle East and Australia. Outside the U.S. and Canada, agriculture and turf equipment is sold to distributors and dealers for resale in over 100 countries.
In the U.S. and Canada, Deere markets products to approximately 2,050 independent dealer locations. Dealers sell equipment and provide customer support; some also participate in equipment rentals. Certain lawn and garden and compact construction products are sold through The Home Depot and Lowe’s. Deere owns some forestry retail operations, while its Wirtgen roadbuilding business uses company-owned sales and service subsidiaries in many markets.
Suppliers and costs
Deere sources raw materials, manufactured components and replacement parts from suppliers around the world. Purchases include steel products, castings, forgings, plastics, hydraulics, electronics and components made to specification. The company also buys goods and services for production, logistics, operations and research and development.
Deere assembles much of its equipment close to its markets; most large agricultural equipment for U.S. customers is assembled in the U.S. It invests in research and development for products, technology and regulatory compliance, and works to manage manufacturing costs through factory, design, logistics and process changes.
Supply disruptions can affect production, particularly when a component comes from a single or proprietary supplier that cannot be replaced quickly. Deere uses multiple sources for selected parts, long-term contracts for some components and alternative freight carriers to address disruption risks.
Deere expects approximately $1.1 billion in direct tariff expense in fiscal 2026, excluding refunds. It expects a tariff expense run rate of around $1 billion in fiscal 2027.
- Revenue$45.7B
- Cost of revenue−$28.2B
- Research and development−$2.3B
- Selling, general and administrative−$4.7B
- Other operating costs−$4.3B
- Operating income$6.3B
Competitive position
Deere competes in global and regional equipment markets on product performance, technology, distribution, financing, service and value. In agriculture and turf, named competitors include AGCO, CNH Industrial, CLAAS, Kubota and Toro. In construction and forestry, Deere names Caterpillar, CNH Industrial, Komatsu and Kubota among its global competitors. Smaller specialist manufacturers and technology-focused businesses also compete in agriculture.
Deere’s dealer network sells and supports equipment, and the company provides parts for current and older products. Its Operations Center connects machines with owners, managers and dealers, while precision technology is available both on equipment and as a retrofit. Deere also owns patents and other intellectual property related to its products and services.
Our reading: The dealer and parts network is a meaningful competitive asset because it helps Deere reach customers and support machines throughout their working lives. Our reading: Integrated equipment and digital tools can reinforce customer relationships, but their protection is limited by competing technologies and by customers’ willingness to adopt and pay for new services. Our reading: Deere’s brand and intellectual property support its position, though neither removes competition from established global manufacturers and regional specialists.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| AGCO Corporation | Agriculture and turf equipment | Medium |
| CNH Industrial N.V. | Agriculture, turf, construction and forestry equipment | High |
| Caterpillar Inc. | Construction and forestry equipment | High |
| CLAAS KGaA mbH | Agriculture and turf equipment | Medium |
| Kubota Tractor Corporation | Agriculture, turf, construction and forestry equipment | Medium |
| The Toro Company | Agriculture and turf equipment | Medium |
| Komatsu Ltd. | Construction and forestry equipment | Medium |
Growth opportunities
Deere is investing in automation, connectivity, digital tools and precision technology across its equipment portfolio. Its Operations Center gives customers access to farm and jobsite information, and the company plans to add AI-enabled capabilities to the system. Deere also offers precision upgrades for equipment already in service and is developing solutions designed around customers’ equipment, service and technology needs over the life of a machine.
The company said its connected machines numbered nearly 1,200,000 in the third quarter of fiscal 2026, and its digital tools had more than 450,000 unique active monthly users. Deere said customers using See & Spray achieved more than 50% herbicide savings. It expects technology, lifecycle solutions and service offerings to contribute to its longer-term ambitions.
In construction and forestry, Deere sees opportunities in precision construction technology, its digital ecosystem and an expanded equipment portfolio. It has launched the first of its Deere-designed excavators and plans to roll out additional models over the next three to four years. Deere also sees an opportunity to increase its exposure to equipment rental through independent rental companies and dealer-owned fleets.
Deere expects the global roadbuilding market to grow approximately 10.0% in fiscal 2026. It expects the agricultural-equipment recovery in 2027 to be measured and to vary by region.
- $44.0BFY2021
- $52.6BFY2022
- $61.3BFY2023
- $51.7BFY2024
- $45.7BFY2025
Structural risks
- Agricultural cycle: Deere’s financial results depend heavily on the agricultural market cycle. Commodity prices, farm costs, interest rates, weather and used-equipment availability can affect customers’ willingness or ability to buy new machinery.
- Supply and trade: Shortages, transportation disruptions and reliance on suppliers that cannot quickly be replaced can interrupt production. Tariffs and other trade restrictions can also add costs. Deere expects approximately $1.1 billion in direct tariff expense in fiscal 2026, excluding refunds.
- Technology adoption: Some precision technology and subscription services have been adopted more slowly than Deere expected. Customers may not see enough value to adopt new products, and Deere may be unable to fully monetize technology-based solutions.
- Financing and economic conditions: Changes in interest rates, liquidity and government policies can affect earnings and cash flows. Access to financing also influences equipment purchases, while Deere’s financial services business provides credit to customers and dealers.
- Cybersecurity and regulation: A breach or disruption to Deere’s systems could interfere with operations and compromise information about employees, customers, suppliers or dealers. Its global operations are also subject to complex and changing laws and regulations.
Bottom line
Our reading
Deere combines cyclical equipment sales with financing and ongoing parts, service and technology offerings. Its dealer network and installed equipment base give it multiple ways to serve customers after a machine is sold, but farm economics remain important to demand. The opportunity to expand connected and precision services depends on customers adopting and paying for them, while tariffs and supply disruptions can add pressure to costs.