The chairman and CEO of Deere and Co., which has been the target of tariff threats by President-elect Donald Trump, on Thursday strongly defended his company’s record of manufacturing farm equipment in the United States and exporting it to other countries.
“We rely heavily on our highly skilled employees in the U.S.” to “design and build … the most technologically advanced equipment in the world. And as a result of that, greater than 75% of all products that we sell in the U.S. are assembled here in the U.S.," Deere Chairman and CEO John May said on the company's quarterly earnings call. May jumped in to answer a question about Trump's tariff threat when it came up on the call.
May said 30,000 employees work at 60 facilities in the U.S., and the company’s Ag and Turf division is “a net exporter” of Deere products.
“We've been at this for nearly 200 years building products in the U.S.,” he said.
During the presidential campaign, Trump said if Deere were to follow through on plans to move some production to Mexico, he would prevent it from selling any of the equipment made there in the U.S. He then claimed Deere had said they would “probably” not build new production facilities outside the U.S., even though Deere had not said anything about the issue.
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The company on Thursday reported sharply lower net income in its fourth quarter but “solid” margins, said Josh Rohleder, direct of investor communications. “Full year operating margins came in at 18.2% reflecting solid, proactive execution throughout our organization amidst a challenging and rapidly changing market environment,” he said.
Deere’s net income for the fourth quarter of 2024, which ended Oct. 27, was $1.245 billion, or $4.55 per share, compared with 2023’s fourth-quarter number of $2.369 billion, or $8.26 per share. For the full year, net income was $7.1 billion, or $25.62 per share, compared with $10.166 billion, or $34.63 per share, in fiscal 2023.
Deere’s production and precision agriculture segment reported net sales of $4.3 billion, down 38% from the same quarter in 2023. Sales for the segment are expected to drop 15% in fiscal 2025 from FY24's $20.8 billion.
“Looking ahead to 2025, we expect continued contraction of ag markets globally to result in ag and turf equipment demand at or below trough levels,” Rohleder said. “Additionally, construction and forestry market demand is expected to be down as healthy end markets are offset by continued uncertainty in equipment purchases.”
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