The United Auto Workers will vote Sunday, Aug. 23, on a two-year contract extension proposed by John Deere. The company says the offer “significantly” enhances wages, benefits, and protections, though the UAW made a counteroffer that exceeded Deere’s proposal by approximately half a billion dollars. The current collective bargaining agreement expires in the fall of 2027.
“We’re hopeful it’s a yes vote so we can drive that certainty into the markets, into our employees, into our company,” says Deanna Kovar, president of the worldwide agriculture & turf division. “If it’s a no vote, we’ll get to work planning to make sure that we can deliver for John Deere customers across the country next November.”
The UAW maintains that John Deere must respect the bargaining process, noting in a statement that shareholders continue “enjoying the ‘continuity’ of collecting the rewards of our members’ hard work.” The union argues workers building the products deserve equal voice in deciding the company’s future alongside those collecting dividends.
Previous Strike Still Fresh in Memory
The last time John Deere and the UAW met at the negotiating table, it led to a month-long strike. Over 10,000 John Deere workers took a stand before a 61% approval of a six-year deal. At the time, that six-year deal included:
- $8,500 signing bonus
- 20% increase in wages over the lifetime of the contract with 10% this year
- Return of cost-of-living adjustments
- Enhanced retirement options
- Enhanced CIPP performance benefits
Strong Quarter Amid Challenges
Deere & Company reported a third-quarter net income of $1.379 billion, an increase when compared to the net income of $1.289 billion at the end of the quarter in 2025. The third quarter also saw worldwide net sales and revenues increase by 5% to $12.608 billion and the first nine months rose by 7% to $35.589 billion.
“Deere delivered a strong quarter, reflecting disciplined execution by our teams and continued resilience across our portfolio,” said John C. May, chairman and chief executive officer. “Our performance underscores the strength of our business, supported by stable U.S. market conditions, our ability to manage softer conditions in Brazil and Europe, and our commitment to helping customers succeed.”
However, net income attributable to Deere & Company was $3.808 billion during the first nine months of the year. This is a decrease when compared to the same time period last year, which saw $3.962 billion.
According to John Deere, the net income attributed to the company for fiscal 2026 is forecast to be in the range of $4.75 billion to $5.00 billion. This would be a slight decrease compared to fiscal year 2025, when net income attributable to Deere & Company was $5.027 billion.
A Farm Economy Turnaround?
Despite an inconsistent few years, Deere & Company remains optimistic for the future.
“We believe 2026 is the bottom of the ag equipment cycle,” Kovar says. “We wholeheartedly believe that we’re continuing to see signs that would tell us that after three years of double-digit declines in North America of equipment and technology purchases that 2026 is the bottom.”
The July Ag Equipment Manufacturers flash report shows tractor sales year to date are down 13.1%. Four wheel drive units are 27% lower and combine sales are down 10.2% on the year.
Kovar says Deere is on the lookout for a turnaround to those recent trends.
“We’re continuing to see signs that would tell us that after three years of double-digit declines in North America of ag equipment and technology purchases that 2026 is the bottom,” she says. “We also are very clear that we’re not sure what kind of rebound it looks like in 2027, and we believe it’s a very measured rebound in 2027 as we think about equipment demand.”
Kovar adds that looking to 2027, Deere recognizes that the fleet of equipment on farms is getting older.
“Some product categories, we’re talking about the oldest fleet since 2000, relative to high horsepower tractors, as an example,” said Kovar. “We also know that customers are going to be needing to upgrade equipment to keep staying cutting edge, but also to keep going and keep getting the acres through the planter and through the combine.”
Union Vote on Sunday
As the company looks forward to an improving farming economy, Kovar explains that this two-year labor extension would extend the contract to 2029. Deere & Company is also offering a 4% wage increase this year and next year, along with some bonuses.
“We’re hopeful, and we believe it’s a fair and equitable deal and we look forward to them saying yes,” Kovar shares.
In a statement ahead of the vote, the UAW said, “We see the same industry conditions Deere sees. We also see Deere’s corporate ledger. We see shareholders enjoying the “continuity” of collecting the rewards of our members’ hard work. The people who build the products have earned just as much of a voice in deciding what comes next as the people collecting the dividends.”
“We’re hopeful that they ratify that agreement,” said Kovar. “There’s a vote this Sunday and it’s all about taking that uncertainty out to make sure that our customers don’t have to worry next year about [whether] John Deere factories and John Deere parts distribution centers are going to go on strike. But at the end of the day, it’s up to the UAW members to vote.”
