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John Deere is in big trouble, and European tractors are replacing them across rural America.
John Deere faces market challenges as European tractors like Fendt gain ground in rural America due to better autonomy and repair options.
Key Takeaways
- Farmers prioritize autonomy, repairability, and operational costs over initial purchase price when choosing tractors.
- John Deere's restrictive software and repair policies have damaged its reputation and market position.
- Fendt's advanced transmission technology and local support network are key competitive advantages.
- Economic pressures and trade costs have compounded Deere's challenges in the agricultural equipment market.
- The right to repair movement is reshaping the industry and empowering farmers.
What the video covers
- John Deere is losing market share in rural America to European tractor brand Fendt, despite Fendt tractors having higher upfront costs.
- Farmers are switching due to better autonomy, control, and transparent diagnostics offered by Fendt, rejecting Deere's restrictive software and repair policies.
- Deere's software locks caused downtime and costly repairs, sparking the right to repair movement and lawsuits against Deere's repair monopoly.
- Deere faced severe economic pressures including job cuts, declining farm income, and high tariffs impacting profitability.
- AGCO, Fendt's parent company, invested heavily in expanding North American support and dealerships to compete locally.
- Fendt's Vario transmission technology offers fuel efficiency, smoother power delivery, and lower engine wear, appealing to large-scale farmers.
- Deere's financials show declining net income and shrinking profit margins, while Fendt sales are projected to grow significantly by 2029.
- The cost of ownership, including fuel and downtime, has become more important than upfront price for farmers.
- Deere's reputation suffered due to perceived poor customer support and software restrictions, while Fendt built trust with transparent service.
- Right to repair laws are now enforced in several US states, further challenging Deere's restrictive repair practices.
Chapters
- 00:00John Deere's Market Trouble and European Tractor Rise
- 00:28Farmers Switch for Autonomy and Control
- 01:03Software Restrictions and the Right to Repair Movement
- 01:55Economic Pressures and Job Cuts at Deere
- 02:38Deere's Financial Decline and Trade Cost Challenges
- 04:37Fendt's Technological Advantages and Market Strategy
- 07:14Fendt's Expansion and Growing Market Presence
- 07:50Deere's Financial Outlook and Industry Impact
Full Transcript — Download SRT & Markdown
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It sounds unthinkable for a brand that has dominated the heartland for over a century, but American farming is evolving faster than ever.
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AGCO's premium tractor brand, Fendt, is stealing huge market share from John Deere, and the way they're doing it is shocking the industry.
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Surprisingly, a new Fendt tractor actually costs more up front than a flagship John Deere.
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So, price isn't the deciding factor here. Instead, farmers are switching for better autonomy and control.
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Farmers have had enough of John Deere's software restrictions. They've watched their tractors slip into limp mode after a simple sensor failure. Tractors were barely able to move, and farmers were blocked from fixing the problem themselves.
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Instead of getting urgent help, they were forced to wait. A certified Deere mechanic had to drive out to the field just to plug in a laptop and clear the error code.
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During the busy harvest season, this kind of downtime cost farmers thousands of dollars every hour.
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Deere claimed these locks were about safety and emissions, but nothing justifies losing thousands of dollars, and the farmers weren't buying the explanation. The frustration burned a hole in Deere's reputation. That anger sparked the massive right to repair movement. Desperate farmers started
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buying black market software just to fix their own machines. Others filed lawsuits, accusing Deere of running a repair monopoly.
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AGCO used this broken trust to its advantage. Fendt tractors are just as advanced, but AGCO chose a different path. They offered transparent diagnostics and a promise to keep machines running. So, was this the only issue that cost [music] John Deere its
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business? Let's find out. To understand John Deere's current vulnerability, let's travel to Waterloo, [music] Iowa, which is the operational center of its large agricultural equipment manufacturing.
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In In the structural integrity of this manufacturing base began to show severe stress. The farming economy was taking a hit. Global demand dropped. US farm income plunged. Interest rates stayed high.
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To cope with this macroeconomic uncertainty, Deere made a controversial decision to slash jobs across the Midwest.
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In Waterloo alone, Deere fired over 1,000 factory workers. Across their other main hubs and their headquarters, total job losses climbed past 2,100.
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The cuts came in brutal, back-to-back rounds. Cutting a little overhead makes sense in a slow economy, but gutting the workforce at your most important factories points to a deeper crisis.
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But while Deere was actively gutting its loyal Iowa workforce, the company was simultaneously bragging about pouring $20 billion into American manufacturing over the next decade.
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To the workers walking out the factory doors with pink slips in hand, that massive number offered zero comfort.
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[music] It was a flat-out insult. The factory floor in Waterloo was just the first warning sign. [music] Deere is losing its grip on the market, and the cracks are now visible to the public eye.
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For the next 2 years, these cracks widened. Fast forward to the third quarter of 2026, [music] and the financial damage was undeniable.
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Deere's earnings reports exposed the mounting pressure. The core agricultural business, [music] which was the true foundation of Deere's empire, was cracking.
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The company's net income for the first 9 months of the year [music] dropped to $3.8 billion. To make things worse, the production and precision ag [music] division, which was considered Deere's jewel, is now projecting a 10% drop in
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sales for the year, [music] with profit margins shrinking fast. Deere is fighting aggressive headwinds not just in the US, but across [music] the globe. High fertilizer costs and steep interest rates are expected to drive South American tractor sales down
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by up to 20%. While severe droughts and expensive operating costs continue to choke the European market.
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On top of everything else, Deere is [music] drowning in trade costs. For 2026, the company is eating about $1.1 billion in direct tariff expenses.
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[music] Because their tariff refund benefits dry out after the third quarter, they are marching into 2027 [music] with a billion-dollar hole they simply can't dodge. For a local dealership owner sitting on tens of millions of dollars in unsold tractors, it's a full-blown
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crisis. Farmers are squeezed by high costs and economic uncertainty, meaning they are holding onto their cash instead of upgrading their fleets.
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For decades, farmers willingly paid Deere's steep upfront prices for one simple reason. Unbeatable resale value.
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Now, that math is breaking down. While Deere was struggling, another brand positioned itself well to get the attention of unsatisfied customers. AGCO positioned Fendt as its [music] weapon in the high horsepower market. And its biggest advantage was the Vario
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transmission. Unlike traditional power shift tractors that move through fixed gears [music] and force the engine to constantly change rpm, Vario lets the tractor maintain a set speed while keeping the engine in its most efficient range.
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[music] That means smoother power, less wasted fuel with lower strain on the engine. Fendt took this even further with its low engine speed concept. Even while pulling heavy loads, machines like the 1000 Vario can operate at surprisingly low rpms, often between 1100 and 1500.
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The idea wasn't new when Fendt finally cracked it. [music] Engineers had been chasing a stepless transmission since the 1970s, when a Fendt designer named Hans Marshall first sketched [music] out the concept. It took over two decades of secretive
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development, including a top secret field test at a farm [music] in the Czech Republic, before Fendt was confident enough to unveil it.
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When the Favorit 926 Vario rolled onto the floor at Agritechnica in 1995, the skepticism in the room can be felt.
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Rival engineers didn't believe a transmission with no fixed gears could hold up under real load.
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By the end of the trade show, they weren't laughing anymore. Fendt did the impossible, and this was just the beginning. For a 5,000-acre farm running tractors around the clock during planting or harvest, that can mean serious fuel savings, less engine
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wear, and a quieter, more comfortable [music] ride. And that was exactly where Fendt was attacking Deere.
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Not the price of the tractor, but the cost of running it. AGCO never tried to beat John Deere on the upfront price tag. Instead, they offered large-scale American growers a brilliant piece of engineering that attacked their highest daily costs, fuel and downtime, while
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making traditional tractor transmissions feel like relics of the past. Seeing Deere tractors break down during peak harvest seasons, AGCO knew they couldn't just ship European tractors across the ocean and hope for the best.
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To truly compete, they had to build local boots-on-the-ground support. [music] Since 2018, AGCO has steadily expanded its North American footprint by adding more than 80 new Fendt locations.
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They cemented this physical expansion in May 2024 [music] by opening the Fendt Lodge in Jackson, Minnesota.
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Sitting right next to their manufacturing plant, this massive 16,000 square foot customer experience center serves as a dedicated hub to welcome American buyers and showcase equipment right in Deere's backyard. [music] These investments are paying off. Fendt now boasts over 200 dealership locations
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across the continent. Slowly but surely, they are chipping away at the local dominance [music] Deere has enjoyed for generations.
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The financial results speak for themselves. AGCO is on track to hit $1.7 billion dollars Fendt sales across North and South America by 2029. By finally closing the service gap, AGCO has successfully turned Fendt from a rare European import
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[music] into a powerhouse alternative for large-scale American farmers. Just weeks before this story came together, Deere actually beat expectations. Their
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for the rest of the year. Wall Street cheered, the stock jumped. For a brief moment, it looked like the bleeding had finally stopped, but one good quarter doesn't fix a broken foundation. That sudden bump in profits was carried almost entirely by a rebound
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in construction and forestry, which completely masked the ongoing disaster in their core farming business. The cracks didn't disappear.
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[music] They were just covered temporarily. For John Deere, the last three fiscal years represent a steep earnings contraction. In fiscal 2023, Deere posted a record $10.16 billion in net income. By 2024, that number slid to $7.1 billion.
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By the end of fiscal 2025, actual net income fell further to $5.02 billion, effectively cutting their net earnings in half over a 24-month span. Then came the opening quarter of 2026. While Deere's overall revenue was buoyed by a
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recovery in construction equipment, its core production and precision ag segment took a massive hit with operating profit plummeting 59% year-over-year under the weight of tariffs and an unfavorable sales mix.
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Meanwhile, AGCO's Q1 earnings for 2026 told a completely different story. AGCO reported a 14.3% jump in net sales reaching $2.3 billion with operating income in key regions [music] surging by over $104 million compared to the prior year.
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AGCO is not winning by undercutting the competition. In fact, if you compare a flagship Fendt 1050 Vario against a comparable John Deere 8R 540, the Fendt frequently carries a higher initial purchase price.
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But large-scale operators are not abandoning multi-generational brand loyalty [music] over initial capital expenditure. The battleground has shifted from what the machine costs to buy [music] to what it costs to keep running. Deere treated farmers like captive subscribers.
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By locking down their diagnostics, the company turned simple sensor faults into expensive, [music] mandatory service calls.
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AGCO saw this weakness and struck. For AGCO, supporting the right to repair is a calculated business [music] strategy.
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The financial difference between the two approaches is massive. Accepting open repairs is not going to cost AGCO absolutely anything.
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Meanwhile, fighting it had cost Deere a $99 million settlement, triggered federal lawsuits, and shattered the trust of its most loyal customers.
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John Deere single-handedly carried the weight of American agriculture for generations [music] and now that reputation is running on fumes.
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People who once trusted Deere started questioning what exactly they were getting for that premium price [music] tag.
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For decades, Deere stood firm with guaranteed uptime, ironclad resale value, and generational reliability. But when software restrictions enforced downtime and the secondary market softens, those legacy claims require verifiable proof. Now, even the law is turning against Deere.
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As of January 2026, strict right to repair laws are officially enforced in states from New York to California.
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By sheer legal force, the era of the mandatory dealer lockout is dead. Deere spent years believing American farmers would never abandon the green paint, no matter how many software locks or costly dealer visits they forced onto to They thought multi-generational brand
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loyalty was bulletproof. [music] They were dead wrong. With Fendt outworking them across the Midwest and new laws stripping away Deere's software monopoly piece by piece, the green giant is finally backed into a corner.
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The battle for the American heartland has completely flipped.
Topics:John DeereFendtAGCOEuropean tractorsright to repairtractor autonomyfarm equipment markettractor transmissionagriculture technologyfarm machinery
