Background Agribusiness
John Deere share price immune to bad news
A machine sale that is not going well, lawsuits about machine maintenance or a president who threatens with import duties. Enough reasons to make the world's largest producer of agricultural machinery, Deere & Co, feel gloomy. The opposite is true when you look at the stock price of this green-yellow giant. It reached a all time high.
The share price of Deere & Co. reached a record of $24 per share on the New York Stock Exchange (NYSE) on Friday, January 478,77. That is $12,77 more (2,75%) than the old record, which was set on November 27. The price is no less than $90 above that of a year ago. The value increased by 23% over twelve months.
Especially during the corona pandemic, the stock market value of John Deere got a big boost. It was seen by investors as a safe haven in turbulent times, when the agricultural sector was developing particularly strongly. Agco and CNH are also doing well on the stock market. The value of the Agco share rose this year from $90 to almost $105. An upward trend is also visible at CNH, although the share is much lower. In January, the value rose from just over $11 to $13.
'Right to Repair' Lawsuit
As mentioned, John Deere has been in the news a lot lately. At the end of this month, the US Federal Trade Commission – the government agency and competition authority that acts as a consumer watchdog – started a lawsuit against the company. It concerns the much-discussed Right to repair act where farmers in the US should have the opportunity to choose who repairs their tractor or machine. John Deere does not allow this and forces farmers to go to authorized dealers. They can also no longer perform repairs themselves.
According to the FTC, John Deere's working methods have allowed it to make sky-high profits. In an official response, the manufacturer states that the allegation is based on incorrect information and that the law is being abused. FTC spokesperson Lina Khan disagrees completely. "The company consistently refuses to share information with independent software companies, who are then unable to develop solutions to repair the machines. This practice is commonplace in the automotive and truck industries."
In Europe, Right to repair legislation was adopted last year by the European Commission. Member states have until 1 August 2026 to implement this in their own legislation.
Lost lawsuit
On the same day, there was more court news about Deere & Co. The company had taken competitor Agco to court. It believes that Precision Planting, a company from the Agco stable that develops precision seeding technology, had infringed two Deere patents. The judge did not agree. The case had been ongoing since 2022 and John Deere had already been found to be in the wrong.
Deere & Co.'s high stock market value is mainly due to its long-term expectations. At the end of last year, when presenting its latest financial figures, the company announced that it expects to achieve a turnover of $2025 to $5 billion for 5,5. In 2024, that was still $7,1 billion and in 2023 even $10,16 billion. In the last quarter of last year, machine sales fell by almost a third and by 16% over a whole year. The stock at dealers worldwide is now more in line with their market expectations. The company is therefore slightly positive about 2025 and 2026, when the market for agricultural machinery will hopefully recover somewhat.
Threats
Since taking office, President Donald Trump has been wasting no time in implementing a series of measures. Last fall, Trump was vocal about John Deere’s plans to move some of its production to Mexico. In response, Trump suggested imposing a 200% import duty on the company’s products that are brought back to the U.S.
Whether the soup will really be eaten as hot remains to be seen. There is a good chance that Trump will use his threats to force jobs to be retained in the Midwest. It does not look like the company from Moline was very impressed by the threat. It has announced a new factory in Mexico, involving $55 million. That factory, where construction machinery will soon be produced, should be operational next year. John Deere already builds individual components and machinery in the country.
Niels van der Boom
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