On Sept. 4, 2025, John Deere said it expects 2025 sales of large agricultural machinery to drop 15–20 percent as higher metal tariffs and softer crop markets push U.S. farmers toward used equipment and smaller purchases.
Key Takeaways
- John Deere projects 2025 sales for large agricultural machines to fall 15–20 percent.
- Tariffs on steel and aluminum have cost the company about $300 million so far, with nearly another $300 million expected by year-end (roughly $600 million total).
- Net income in the most recent quarter fell 29 percent year over year.
- U.S. soybean exports to China are down about 51 percent this year; U.S. soybean sales to China totaled $13 billion in 2024.
- Crop prices have weakened: corn is about 50 percent below mid-2022 highs and soybeans roughly 40 percent lower.
- John Deere employs about 30,000 workers in 60 U.S. facilities and says more than 75 percent of its machines are assembled domestically.
- Farmers are shifting to used machines or delaying purchases, boosting the secondhand market.
Verified Facts
John Deere reported that net income for its most recent quarter declined 29 percent compared with the same period last year. The company has attributed part of the earnings pressure to tariffs: roughly $300 million in costs have already been logged, and company statements indicate nearly another $300 million is expected by the end of 2025.
This summer the firm cut 238 positions across plants in Illinois and Iowa; an earlier slowdown had led Deere to reduce production and lay off more than 2,000 workers at the start of last year. Deere currently employs about 30,000 people in some 60 facilities across the United States and says roughly 75 percent of its machines are assembled domestically, with about 25 percent of components sourced abroad.
Market conditions for farm equipment are tightly linked to crop prices and export demand. Corn prices are around half their mid-2022 peaks and soybean prices are down roughly 40 percent. Higher supplies and weaker foreign demand—especially after retaliatory Chinese tariffs on U.S. soybeans—have pushed U.S. soybean purchases by China down about 51 percent this year; U.S. soybean exports to China were about $13 billion in 2024.
The U.S. Department of Agriculture projects near-record corn and soybean yields this fall, but that abundance and reduced Chinese buying are expected to lower grower revenue: the USDA estimates U.S. farmers will receive about $3.4 billion less for soybeans than last year.
Context & Impact
New-tractor list prices have risen substantially over the past eight years—some models are at least 60 percent more expensive overall, with certain models more than doubling—pushing many buyers into the used-equipment market. Dealers and auctioneers report farmers who once bought only new machines are increasingly seeking secondhand units to reduce costs.
Higher borrowing costs, uncertain trade policy and the tariff-driven increase in input costs make capital purchases riskier for farmers. Dealers and manufacturers have offered more attractive financing at times to move inventory, but Deere now sees softness extending into 2026.
Competition and supply chains alter how tariffs affect manufacturers. Brands that source or assemble more abroad—such as some competitors—may face larger tariff bills on imported machines, while Deere’s relatively higher domestic assembly share offers partial insulation but does not eliminate input-cost exposure.
Near-term risks
- Tariff policy shifts affecting steel, aluminum and machinery imports.
- Further declines in crop prices or export demand, especially from China.
- Higher interest rates that raise financing costs for equipment purchases.
- Volatility in steel and commodity input prices.
“Customers are operating in increasingly dynamic markets,” said Josh Beal, director of investor relations, noting tariffs, high rates and global trade changes are prompting caution on capital purchases.
John Deere investor relations
Unconfirmed
- Timing and scale of any near-term restoration of Chinese soybean purchases beyond current reports.
- Exact future trajectory of steel and aluminum prices through 2026.
- How quickly farmers will respond to tax-law incentives versus continued market uncertainty.
Bottom Line
Tariffs and weak global demand have combined with lower crop prices to squeeze both American farmers and their equipment suppliers. For John Deere, higher input costs and softer farm purchasing power have cut into profits and prompted workforce reductions; some recovery in 2026 is possible if tax incentives take hold and trade tensions ease.