After months of workforce reductions and sliding equipment sales, John Deere is reversing course, announcing it will bring 140 employees back to its Waterloo, Iowa, operations as demand ticks higher for its 8R and 9R tractors.
The recall comes even as Deere forecasts the North American ag equipment market will decline another 15% to 20% in 2026, underscoring the push-and-pull shaping today’s farm economy. Large equipment sales remain under pressure from lower commodity prices and tighter margins, yet pockets of global demand are forcing Deere to recalibrate production in real time.
In an exclusive interview with Farm Journal this week, Deere & Company President Deanna Kovar laid out how the company is navigating that tension: tightening its long-standing build-for-retail manufacturing model, adjusting output month to month and working to protect farmers’ equipment equity during a downturn.
At the same time, Deere is attacking costs where it can, reducing prices on 187,000 parts over the past two years and preparing to roll out a new lower-priced tier of replacement parts later this summer. The company is also testing a tractor powered by E-98 ethanol, technology that could eventually eliminate the need for Diesel Exhaust Fluid (DEF) altogether while driving even more demand for the crops farmers already grow.
For Kovar, who grew up on a Wisconsin dairy farm before spending 26 years rising through Deere’s ranks, the stakes are personal. Now, just months into her role leading Deere’s Worldwide Agriculture & Turf Division, she is steering the company through one of the sharpest equipment pullbacks in recent memory, while positioning it for what comes next.
A Cyclical Business in a Prolonged Downturn
The ag equipment cycle has clearly turned. Industry data show steep drops in large equipment sales, and Deere’s internal outlook aligns with the broader trend.
“Deere is 188 years old, so we know we’re part of a cyclical business of ag equipment, but definitely we’re seeing similar numbers. Our expectations that we shared in our last quarterly earnings was that the North American equipment market would be down 15% to 20% again in 2026. We recognize the ag economy is in a tough spot at the moment, and we’re working hard to make sure we can help farmers become more productive and more profitable through using our equipment and technology solutions, but it’s tough out there.”
She says the Association of Equipment Manufacturers figures for 2025, which show sales of 4WD tractors fell nearly 42% and combine sales are down 36%, align with what Deere is seeing.
The significant slump in sales doesn’t come as a surprise to row crop farmers who’ve seen several consecutive years of declining net farm income following a record high in 2022. USDA’s first official forecast for 2026 suggests continued pressure and another year of declining net farm income, with not much relief on input prices and stagnant commodity prices. Kovar says Deere understands the financial strains producers are seeing.
“Overall, the outlook for 2026 is that farmers are going to continue to be under pressure from a commodity price standpoint,” she says. “We’re certainly seeing input costs somewhat flatten for producers, and, of course, many producers are grateful for the government payments that will help them start 2026 maybe in a better place than they would have without it. Certainly great yields last fall were a good positive thing for producers, but it’s still putting a lot of pressure on commodity prices today.”
For Deere, that pressure translates directly into lower equipment demand and tough decisions inside its factories.
Manufacturing Adjustments: Building for Retail in Real Time
Over the past year, Deere announced workforce reductions across multiple Midwestern facilities. Since 2024, it’s reported John Deere laid off over 2,000 employees in the U.S., with those jobs primarily located in Iowa and Illinois. Recently, it reversed course in a couple locations, announcing it would bring some of those employees back.
Back in January, Deere also announced it was returning 99 workers to the job in Iowa, impacting both its Davenport Works and Dubuque facilities. But Deere said this week it’s also bringing back jobs at its Waterloo facility.
“We’re constantly evaluating what we think the market will be. And it’s not an annual thing. It’s a month to month, a quarter-to-quarter opportunity. And yes, we just announced 140 workers to come back to our Waterloo operations. This is the operations where we make the drive trains for 8R tractors, where we pour the castings for the new high horsepower 9R tractors, where engines are made, and where we put tractors final assembly together. So we’re always happy when we can bring workers back into our factory. And it’s because we’re starting to see a little tick up in demand for those tractors,” she says.
Kovar says it’s not necessarily just a North American phenomenon. The uptick in demand is coming globally.
“We are seeing some signs that there could be some opportunities, but much of this is going to be iterative over time. It won’t be from a very low point to a very high point. We expect over time that we can start to see things normal,” she adds.
Kovar emphasizes Deere’s long-standing “build-for-retail” philosophy, avoiding overproduction that would flood dealer lots and depress used values.
“We’ve been in business for 188 years, so we’re always making sure that we’re being as efficient and effective as we can at building the quality products that farmers come to rely on. So we’re all always adjusting how we manufacture, how we make sure we have the quality checks and the automation to make sure we’re making every tractor as good as we can,” says Kovar.
She says the company is also working to forecast demand expectations and where that additional demand could surface. But she says for the past 25 years, the company has been focused on a build-to-order mentality, especially in the larger ag equipment space.
“We are a build for retail mentality,” says Kovar. “We don’t want to build it unless somebody wants it. So this has been something we’ve been working on for 20 years, and we will continue to be focused on really understanding the demand in the market and making sure we’re setting up schedules and plans to build for that amount.”
Equipment Prices: It’s About the Trade Differential
Few issues generate more coffee-shop debate than equipment prices. Farmers have seen machinery values dramatically climb over the past five years. Kovar points out that looking at sticker price alone misses the bigger financial picture.
“We’re always looking at making sure we’re delivering value for farmers when they buy our equipment, when they buy our technology,” Kovar says. “When we think about the price of equipment it’s really important we understand that farmers, when they buy a new piece of equipment, it’s really about the trade differential from the product they’re trading in to the one they’re buying, and if we were to lower the price of equipment, it would lower the trade-in value of their used equipment as well. We’re always very mindful of the equity farmers have in their equipment fleet and the fact it’s a huge part of their balance sheet.”
Not only does Deere need to be careful that changes don’t impact the trade differential, but she says the company is also focused on making sure there’s a balance between products being affordable and creating the value farmers expect.
That balance, of affordability versus protecting used values, according to Kovar, shapes Deere’s pricing philosophy in a down cycle.
Lowering the Cost of Technology and Parts
While base machine pricing remains complex, Deere is targeting affordability in other ways. The first, she says, is on the technology side, and lowering the upfront cost.
“We’re lowering the barrier to entry to amazing technologies like ExactShot fertilizer systems, See & Spray sprayer systems and a combine automation system so that more farmers can afford to get into the technology. These technologies are saving inputs, ensuring we’re getting all of the grain out of the field and increasing yields. That strategy to lower the upfront cost of those technologies, and help the customer pay for it as they get the value from it, is a huge step forward in allowing affordability of the technology.”
On repairs and parts, she points to self-service tools and direct price reductions. She says the company is constantly looking at the cost of parts for their equipment.
“Over the last two years, we’ve reduced the price on over 187,000 part numbers in the John Deere system. Later this summer, we’re going to be announcing a new tier of parts from John Deare that will allow us to give customers choice when they buy parts from us as to whether they want the traditional OEM, that likely has a longer life, or if they want to look at a lower cost option,” Kovar says.
Deciding between the two parts tiers depends on:
- How much a farmer uses the machine
- Equipment age
- How long a farmer intends to keep that piece of equipment
Retrofit Kits: Precision Without the New Iron Price Tag
As new equipment sales slow and more farmers turn to the used market, Deere sees retrofit technology as a critical bridge, allowing producers to upgrade performance without taking on the cost of a brand-new machine.
Kovar says retrofit kits are designed to separate technology adoption from iron replacement.
“I think the beauty of retrofit kits is you don’t have to buy a brand new piece of equipment to get brand new technologies. Just last year we launched what we call our precision ag essentials kit, which is the foundation of our technology stack. It’s where farmers start to go from no precision to a more precision mentality, and this ability allows them to put a John Deere GPS receiver, a display and a modem on any piece of equipment, Deere or non Deere,” Kovar says.
The strategy fits squarely into Deere’s broader push to lower the barrier to entry for precision ag. By allowing a GPS receiver, display and modem to be installed on any brand of older equipment, the company is effectively expanding the addressable market for advanced automation and data tools.
“We’re seeing people put these kits on 20-year-old tractors and then being able to do things like AutoTrac, AutoPath and turn automation, section control, the things that can save 10% of inputs and make sure your stand is better in the spring and your weeds are deader during the season,” Kovar says. “This is a huge opportunity for every farmer to get more into precision. Once you get into that base of the technology stack, the sky’s the limit to be able to go to other products like ExactEmerge or See and Spray — these technologies that really drive savings to the bottom line for farmers.”
In a downturn defined by lower commodity prices and cautious equipment purchases, Deere is betting the future of precision ag won’t be limited to the newest machines on the lot, but will increasingly ride on tractors that have already been in the field for decades.
Right to Repair, EPA and DEF: Seeking Clarity
Right-to-repair and diesel exhaust fluid (DEF) rules have been flash points between manufacturers and producers with two major announcements from EPA.
In early February 2026, EPA made a right-to-repair guidance announcement guidance and actions supporting the right to repair for farmers and equipment owners, specifically addressing issues with Diesel Exhaust Fluid (DEF) systems and emission controls. The guidance clarifies the Clean Air Act allows for temporary overrides of emission systems during repairs, prohibits manufacturers from restricting access to tools or software, and enables repairs in the field.
The following day, EPA announced the agency is demanding detailed failure data from major diesel engine manufacturers as it considers additional rules aimed at reducing DEF-related shutdowns and derates that have plagued farmers, truckers and equipment operators for years.
“I think if you step back and think about what EPA’s done over about the last nine months, there’s been two important messages. One was last summer when they gave voluntary guidance that said we should extend the time from when a customer might have an issue with their DEF systems and not cause them to go into an inducement or a derate within two hours, which was the original rule. We’re very glad EPA has come out and said we can extend that time to give farmers more time to maybe finish the field, finish the day before they have to execute a derate or go through a regen on their DEF,” Kovar says.
She calls it a huge opportunity for Deere and one to which the company is already responding.
“We’re in the process of making sure we can extent that time on all the equipment we’re producing. We’ll do that over the coming months and years to help make sure we’re extending that time and not putting people in jeopardy of having a shutdown opportunity,” Kovar says.
On off-road right-to-repair clarity, Kovar says EPA’s right-to-repair guidance announced in February directly responds to a formal request the company made to the agency in June 2025.
“[EPS] had already shared that on-road equipment didn’t have to go to the original equipment manufacturer or an authorized repair shop to turn your tractor or your truck back on after you had a deratement issue. We said, ‘Hey, we have tools that a farmer can do this on their own, but the way we read your rules, we believe we need you to tell us it’s OK.’ We’re grateful that last week EPA came out and said, yes, it is OK for off-road equipment for farmers to fix their own issues. We’re in the process of making sure John Deere Operations Center ProService, which is our self-repair tool any farmer can access, by early March, mid-March, we want to have the ability for a farmer to, if they run into a deratement issue on their tractor or combine or whatever, use Operation Center Pro Service to get their tractors back up.”
If DEF Goes Away, It’s Not a Quick Switch
With political discussions swirling around eliminating certain environmental regulations, and President Trump specifically stating he wants to see those regulations removed on equipment, some farmers wonder whether equipment could quickly be built without DEF systems.
When Trump was in a roundtable with farmers in December, he claimed removing those requirements on equipment would prevent breakdowns and make equipment cheaper. During the one-on-one interview with Kovar, Farm Journal asked if removing DEF on equipment would bring down prices.
“We have to really understand what they mean and how they want to go about it before we can really answer, does it make equipment cheaper? I think we’ve spent 15 years perfecting the system we have today, so we’ll have to continue to understand how far back do we think we’re going to go, how long would it take us, because we don’t have all of the technologies that don’t have DEF today,” Kovar explains. “If it were called tomorrow, we couldn’t start building tractors without it the next day.”
Removing DEF is not as simple as flipping a switch on the assembly line. Instead, she says Deere is focused on making sure farmers have the ability to repair their own equipment if it would go into derate. She thinks that’s a huge step forward in solving some of the issues that farmers have had with DEF.
Deere Tests an E-98 Ethanol Tractor
Even as debate continues in Washington over DEF requirements, Deere is exploring a future that could bypass the issue entirely.
While the company says it remains engaged with EPA on next steps surrounding DEF and emissions policy, Deere is also investing in an alternative fuel platform, an ethanol-powered tractor designed to run on E-98. The tractor will debut at Commodity Classic in two weeks.
“We’re not just thinking also about diesel, right, we also considering how might we fix this problem another way. And that’s an ethanol tractor we’ve been using across Iowa and other places. It’s early for us, but the idea that we could use E-98 to run a tractor, it’s so clean you don’t need diesel exhaust fluid to run it. We’re early in trying to pioneer what is an alternative to diesel that would allow a farmer to grow the fuel they put in their tractor to grow next year’s crop. It’s something we think we need to continue to talk about. There is a ton of infrastructure that would need to follow to allow an E-98-type fuel to flow and be on farm, but we think it’s an opportunity in the long run to help agriculture grow the fuel they use to grow the food we all eat.”
Deere confirms the early results are promising.
According to Deere, the limiting factor isn’t the engine technology itself, it’s the infrastructure needed to support it.
“Do we have the fuels available? Do we have the on-farm ability? Are the fuel companies ready to deliver it to the farm? At this point, there is a much bigger system challenge that will have to work,” Kovar says.
Advocating for Demand: Ethanol, Exports and E-15
Turning the ag economy around, in Kovar’s view, is about demand, both domestic and global. Not only is Deere working on equipment that could run with higher blends of ethanol, but Deere is also advocating for more demand.
“Certainly, we’re focused on helping farmers grow more with less. At the same time, we’re focused on helping to make sure there are markets for the crops our producers sell. We certainly spend a lot of time advocating for agriculture and for producers to have access to markets. We’re grateful for all of the trade deals that have happened here recently. We’re hopeful they start to materialize, and we see more and more grains flowing outside of the U.S. in exports. We also know we’ve got a huge opportunity here in the U.S. to drive ethanol and renewable fuels,” Kovar says. “We’re focused on making sure we’re using our voice at Deere to advocate for agriculture to not only feed the world, but fuel it. It starts with E-15, which we are hopeful we can get across the finish line at some point very soon. But it can’t end there. We have to continue to advocate for renewable diesels and an ethanol future, so we have to make sure farmers can sell their grains at a price that’s profitable, and it’s all about creating demand.”
The Next Five Years: From Data Collection to Real-Time Decisions
For Deere, which sees itself as a technology company, Kovar says she also sees Deere as a smart industrial company. With a focus on technology, she thinks the future isn’t about a single breakthrough machine, but rather about what happens behind the scenes in the data.
When asked what the biggest shift will be over the next five years, Kovar points to the evolution of information rooted in data.
“I think if you look back over those 25 years of technology, data has been such an important part of it. It started with yield maps, yield monitoring and binders on a shelf and has evolved over time to a cloud-based system. Everything’s connected. With Deere, it’s about John Deere Operation Center and how farmers can leverage that data, share it with partners, with their seed dealer, with their ag retailer, with the banker and with their landlords and have this really cohesive opportunity to bring all of the data they have in agriculture into one place,” Kovar says.
Personally, she sees the next step involving Deere helping farmers move beyond timely insights to timely decision-making.
“How do we help [farmers] get insights, timely information, that helps them make the best decision they can make in that moment on their unique piece of land in the middle of wherever they are farming and really give them confidence the data can help them drive to even better decisions,” she adds. “If we’re going to help them be more productive and be more profitable, it really starts with all the decisions they make. I think this next three to five years is a huge opportunity for us to make sure we are connecting all of their data in one place and helping them make really important decisions in real time that help them become more.”
Instead of one sweeping, industry-altering change, Kovar sees steady gains driven by machine learning, automation and in-the-moment decision-making, sometimes by the operator and sometimes by the equipment itself.
“I think that’s a huge part of the next three to five years, and those decisions happen because they’ve consciously made them or the machines are making them. If you think about See and Spray, it is deciding whether that’s a weed or a plant and only spraying the weed to save 50% to 60% of the herbicides,” Kovar says. “Those kind of in-the-moment decisions are a huge opportunity over the next 3 to 5 years as computer vision and machine learning compute and all of these things continue to accelerate at a pace that is very hard to keep up with.”
For Deere, the future isn’t just bigger iron or even more automation, it’s about connecting every data point on the farm and turning it into actionable insight, fast enough to matter in the field.
Watch the full interview here:
