Autonomous Tractors? $2B in Debt? Nothing’s Stopping John Deere’s Stock from Breaking Down

Turns out, self-driving tractors and a fresh $2 billion in debt weren’t enough to keep John Deere from getting steamrolled after its earnings report. The “big green tractor” from the famous Jason Aldean song reported a 35% revenue drop, missed analysts’ estimates, and is down 5% so far. And if that wasn’t bad enough, Trump’s tariffs look like they could kill the whole harvest for the rest of the year.

First-quarter net sales fell 35% to $6.81 billion, coming in way short of the expected $7.7 billion. You don’t need to be a math whiz to know that’s bad. Deere did beat on earnings per share ($3.19 vs. $3.11 expected), but it wasn’t enough.

Deere’s North American sales are expected to be down 30% this year, because (shockingly) farmers aren’t exactly in a spending mood when grain prices are horrible and the cost of everything else is skyrocketing. On the other hand, the company’s production and precision agriculture segment (aka the stuff that actually makes money) is projected to drop 15-20%. That’s… also bad.

Just when Deere thought things couldn’t get worse, Trump’s tariffs are circling like vultures. The President’s latest trade war threats have the potential to slam Deere from all angles. For one, the price of industrial metals is already soaring thanks to the 25% tariffs on steel and aluminum. That means making tractors is getting more expensive, while farmers (Deere’s main customers) are taking body blows from retaliatory tariffs from China, Mexico, and Canada.

In other words, the farmers who might have considered buying new equipment are now stuck choosing between fixing their old tractors or just renting.

Deere, in what we can only assume was a move straight out of the “buy now, cry later” playbook, also just took on $2 billion in new debt. The company is issuing $1.25 billion in notes due in 2035 with a 5.45% interest rate and another $750 million in notes due in 2055 with a 5.7% rate. Basically, they’re hoping that if they can just hold their breath long enough, the economy and tariffs won’t strangle them completely.

I’m sure they know that borrowing money at these rates while your sales are tanking isn’t exactly a genius move. But what other choice do they have to try to survive? It’s more like putting your groceries on a credit card with a 20% APR and hoping your next paycheck magically quadruples. It’s a never ending spiral.

Deere’s other big play is robots. At CES 2025, they rolled out a lineup of autonomous tractors, dump trucks, and mowers, claiming that AI-powered farm equipment will be the answer to labor shortages and rising costs. Great idea in theory… except most farmers are already struggling to afford regular tractors, let alone ones that come with an NVIDIA chip and a four-figure price tag for software updates. But hey, I like ingenuity.

Deere also announced retrofit kits for older tractors, but most of the farmers I know won’t be interested in turning their 15-year-old machine into a Tesla-wannabe with a subscription plan. While this might help in the long run, it’s not going to stop the money problems anytime soon.

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