John Deere predicts major losses as tariffs settle in

As tariffs settle in, John Deere, one of the nation’s largest manufacturers of heavy farm equipment, continues to suffer financial losses due to tariff costs. 

In August, John Deere reported that its most recent quarter net income was down 29% from a year earlier, according to a New York Times (NYT) report. The company has reported $300 million in tariff-related costs and predicts an additional $300 million by the end of the year. In addition to incurring extra costs, John Deere laid off more than 200 employees across factories in Iowa and Illinois this summer. 

John Deere has 30,000 employees spread across 60 facilities nationwide, reported the NYT. More than three-quarters of its machines are assembled in the United States, while only 25% of the components used in its products are sourced from abroad. John Deere predicts a 15-20% decrease in sales of large agricultural machinery, which is the source of most of the company’s revenue, and expects the decrease to continue into 2026. 

This is expected to hit North Carolina soybean farmers particularly hard, as soybeans are a machinery-heavy crop. When crop prices are high, farmers tend to purchase new equipment as they have a surplus of cash. However, crop prices have been down, with soybeans down 40% from the mid-2022 high, according to the NYT.  

North Carolina farmers will also feel the tariffs on steel and aluminum at 50% impact farmers and manufacturers like John Deere. In addition, farmers are being affected by the retaliatory tariffs China placed on US soybeans back in March. 

According to the Office of the US Trade Representative, North Carolina exported $446 million worth of soybeans in 2022. 

“Unfortunately, we are beginning to feel the unintended negative consequences of tariffs,” Jon Sanders, director of the Center for Food Power and Life at the John Locke Foundation, told the Carolina Journal. “Two years ago, John Deere enjoyed record profits. Now the company is seeing tariff-related spikes in steel and aluminum costs and a steep drop in income, and it has begun layoffs. Normal market ins and outs are hard enough to navigate, but these impacts from policy changes resound throughout the economy. Tariffs are notorious for causing unintended harms on the countries that level them.”

In 2022, 5,683 farms produced soybeans across all 100 counties, but predominantly in Piedmont and the Coastal Plains regions, Charles Hall, executive director of the North Carolina Soybean Producers Association, told the Carolina Journal in a previous interview. Most soybean farmers also grow other crops, such as corn, cotton, tobacco, and sweet potatoes. 

The United States Department of Agriculture (USDA) reported that approximately 1.63 million acres of soybeans were harvested in North Carolina in 2023, down from 1.68 million in 2022. Soybeans are fifth in cash receipts for North Carolina. According to a USDA report, soybeans accounted for about 5.7% of farm cash receipts for North Carolina in 2023.

“John Deere predicts major losses as tariffs settle in” was originally published on www.carolinajournal.com.