Deere’s losing traction as US farms struggle through a hot, expensive year

Oh Deere… Deere’s quarterly earnings showed that the world’s largest farm-equipment manufacturer has a cornucopia of problems. Sagging demand for its green-and-yellow tractors plowed into sales, which fell 17%. Profit plunged 42%. Still, the drop was less than analysts expected, and Deere stuck with its annual profit forecast. The stock popped 6% yesterday (its biggest daily gain in over a year). It’s been a bumpy road for the company.

• Reaping and sowing: Deere has laid off an estimated 1.5K US workers recently, drawing ire from unions. The UAW — which held a five week, 10K-worker strike against Deere in 2021 — blasted its $43B in stock buybacks over the past two decades.

• Diversity retreat: Last month Deere said it would end its diversity-and-inclusion efforts following conservative pressure and a similar move by Tractor Supply. It came just weeks after Deere paid $1M+ to resolve allegations of discriminatory hiring.

Not bringing home the bacon… The USDA forecast that this year farms will rake in $116B, down 27% from last year and down 41% from 2022. That’s the biggest two-year decline in over four decades. Corn prices fell to below $4/bushel in July, marking a 37% drop from last summer’s peak. Seed and chemical costs have spiked, and intense heat waves and droughts have damaged crops and livestock. All these problems have hurt farmers’ ability to invest in shiny new equipment from companies like Deere.