Deere & Company
Deere & Company engages in the manufacture and distribution of various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. The Production and Precision Agriculture segment provides four-wheel-drive track and row crop tractors, harvesters, cotton pickers and strippers, sugarcane harvesters and loaders, soil preparation, tillage, seeding, and crop care equipment, as well as application equipment, including sprayers and nutrient management, soil preparation machinery, and related attachments and service parts. The Small Agriculture and Turf segment offers specialty, utility, and compact tractors; self-propelled forage harvesters and attachments; rotary mowers, hay and forage equipment, and utility vehicles; turf and utility equipment, including riding lawn, commercial mowing, and golf course equipment, and utility vehicles, as well as implements for mowing, tilling, snow and debris handling, aerating, residential, commercial, golf, and sports turf care applications. The Construction and Forestry segment provides backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, skid-steer loaders, milling machines, recyclers, slipform and asphalt pavers, surface miners, compactors, tandem, static rollers, mobile crushers and screens, mobile and stationary asphalt plants, and log harvesters; and road building and rehabilitation equipment. The Financial Services segment finances sales and leases agriculture and turf, and construction and forestry equipment. It also offers wholesale financing to dealers of the foregoing equipment; and extended equipment warranties. Deere & Company has a strategic partnership with Tarter USA to develop and produce flex wing rotary cutters. The company was founded in 1837 and is headquartered in Moline, Illinois.
What does it do?
Deere & Company — the brand behind the iconic green-and-yellow John Deere tractors — makes the massive machines that farmers and construction crews depend on every day. Think combines that harvest thousands of acres of corn, or bulldozers clearing land for new housing developments. Beyond the iron and steel, Deere now builds software into its equipment so farmers can plant seeds with GPS precision down to the inch. It also has a financial arm that helps customers finance and insure the equipment they buy.
Deere is essentially a proxy for global food production and infrastructure spending — two things that never really go away. Investors watch it closely because its order books act like an early warning system for the health of the farming economy and construction activity across North America. Right now it's navigating a sharp slowdown after a historic boom, making it a test case for whether agricultural equipment demand is normalizing or crashing.
How does it make money?
Deere makes money primarily by selling and financing large equipment across four business lines. Its biggest segment, Production and Precision Agriculture, sells high-end farm equipment to large commercial farmers and generated the bulk of its $38.9B in revenue last year. The Construction and Forestry segment sells excavators, loaders, and forestry machines to builders and contractors. The Financial Services arm charges interest on loans and leases to customers who can't or won't pay cash upfront — a steady income stream even when equipment sales slow down. Revenue dropped roughly $6B year-over-year from $44.8B to $38.9B, a sign that the post-pandemic equipment boom is cooling off.
Why do investors care?
The long-term bull case for Deere rests on two things: the world needs more food, and farming is getting more tech-driven. Deere's precision agriculture technology — think self-driving tractors and AI-powered crop sprayers that only spray where weeds actually are — creates a software-like recurring revenue layer on top of hardware sales. If farmers increasingly subscribe to Deere's data and automation tools, the company could trade more like a technology company than a cyclical manufacturer. For that to happen, farmers need to keep adopting the tech and Deere needs to defend its turf against rivals like CNH Industrial and startups entering the space.
Deep Dive
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