In this articleDEFollow your favorite stocksCREATE FREE ACCOUNTAttendees view a John Deere 7R 270 row crop tractor at the Deere & Co. booth during the World Ag Expo at the International Agri-Center in Tulare, California on February 11, 2025. Patrick T. Fallon | AFP | Getty ImagesJohn Deere is facing a crossroads as the company continues to see weaker demand in the agricultural sector even while it has committed to investing millions in U.S. manufacturing and promised a brighter road ahead.The agricultural machinery company warned on its fiscal third-quarter earnings call last week that it is seeing much softer demand, posting significant year-over-year decreases in net income and sales.The company is working to position itself in the larger agricultural sector, which has seen growing challenges with rising costs, climate change impacts, labor shortages and more.Farmers have also been dealing with lower prices on crops like corn and grain and have pared back their spending as a result. In turn, Deere’s target audience has pulled back on its willingness to buy new agricultural equipment.Deere has also been hit by tariff costs, estimating that it could take a $600 million hit for the fiscal 2025 year. The company has already seen $300 million in tariff expenses year-to-date.Just after reporting its earnings, the company confirmed to CNBC that it announced 238 layoffs across its Illinois and Iowa factories, adding to thousands who have been laid off over the past year. The company cited decreased demand and lower order volumes as the main factors behind the job reductions.”As stated on our most recent earnings call, the struggling ag economy continues to impact orders for John Deere equipment,” Deere told CNBC in a statement. “This is a challenging time for many farmers, growers and producers, and directly impacts our business in the near term.”The manufacturer employs more than 70,000 people globally.Still, Deere has identified enough green shoots to point to a less troubling future.On its most recent earnings call, company executives emphasized the growth in demand in both Europe and South America after seeing weakness in North America. Despite macroeconomic headwinds, Deere’s president of its worldwide agriculture and turf division said the company remains confident in its future.”We think there’s positive tailwinds from both what we see in the trade deals, and we think there are positive tailwinds from what we see in tax policy,” Reed said on the call.And in June, the company released a statement that “myth-busted” any claims that Deere might need to shut down its U.S. manufacturing due to the fall in demand. Instead, the company said it was making a “bold move” to invest $20 billion into U.S. manufacturing over the next 10 years.It follows a similar string of announcements from companies trying to shore up their “Made in the USA” bona fides since President Donald Trump took office. Before the election, Trump threatened Deere with 200% tariffs if it moved production to factories in Mexico.”Over the next decade, we will continue to make significant investments in our core U.S. market,” CEO John May said in a statement in June. “This underscores our dedication to innovation and growth while staying cost-competitive in a global market.”What Wall Street is sayingDespite the struggles in the broader agricultural sector, Wall Street analysts on the whole remain optimistic about Deere’s road ahead.Oppenheimer analyst Kristen Owen wrote last week that she remains bullish on Deere and expects increased confidence into 2026, telling CNBC that she believes the company is taking an “appropriately cau …
