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⚠ South America Down AgainModerate threat

Deere & Company (DE) — threat to the moat

Deere expects South American industry sales to fall another 15% to 20% in fiscal 2026, after a 32% drop in its Latin American sales.

Selling half the bank did not sell the market. Deere expects South American tractor and combine industry sales to fall 15% to 20% in fiscal 20261, after its Latin American sales had already dropped from $8,197 million to $5,607 million between fiscal 2023 and fiscal 20252. On the third-quarter call management said the outlook reflected further industry softening within South America and Europe3.

Deere net sales and revenues in Latin America ($M)8,197FY20235,538FY20245,607FY2025Deere Form 10-K FY2025, Note 5 geographic markets
A third gone before the next leg down.

The production and precision agriculture segment, which sells the large machines Brazil buys, saw third-quarter sales fall because of lower shipment volumes, primarily in Brazil and Europe4. The segment's sales are guided down about 10% for the year5.

A Brazilian downturn arrives through three doors at once: fewer machines sold, a weaker local bank partner, and the currency. Deere's equity stake and guarantees in the Brazilian bank are smaller than before, but its factories at Montenegro and Indaiatuba still depend on local demand6.

Deere has cut production rather than build stock. Management said on the call that, with fourth-quarter order books closed, it is producing slightly less than retail demand in the region7, which protects dealers from excess inventory going into fiscal 2027 at the cost of lower factory utilisation now.

Latin American net sales and revenues below $5 billion in fiscal 2026 would mean the region has cost Deere more than a third of its peak business there.

References
  1. ReportedDeere expects South American tractor and combine industry sales to fall 15% to 20% in fiscal 2026, after its Latin American sales had already dropped from $8,197 million to $5,607 million between fiscal 2023 and fiscal 2025.
    Deere & Company third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - net income, segment results, the industry and segment outlook for fiscal 2026 and net income guidance of $4.75-5.00 billion. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  2. ReportedDeere expects South American tractor and combine industry sales to fall 15% to 20% in fiscal 2026, after its Latin American sales had already dropped from $8,197 million to $5,607 million between fiscal 2023 and fiscal 2025.
    Deere & Company Form 10-K for fiscal 2025 (year ended 2 November 2025), $ millions - segment net sales and operating profit (Note 27), revenue by product line and geography (Note 5), backlog and goodwill. — FY2025 · publ. 18 December 2025 · source ↗
  3. ReportedOn the third-quarter call management said the outlook reflected further industry softening within South America and Europe.
    Deere & Company third-quarter fiscal 2026 earnings call, FactSet corrected transcript - engaged and highly engaged acres, See & Spray adoption, early order programs, construction backlogs, tariffs, equipment cash flow guidance and the FTC settlement - outlook, early order programs, construction backlogs, tariffs, cash flow and the FTC settlement. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  4. ReportedThe production and precision agriculture segment, which sells the large machines Brazil buys, saw third-quarter sales fall because of lower shipment volumes, primarily in Brazil and Europe.
    Deere & Company Form 10-Q for the quarter ended 2 August 2026, $ millions - segment results for the quarter and nine months, price realization and the Tenna acquisition. — Q3 FY2026 · publ. 27 August 2026 · source ↗
  5. ReportedThe segment's sales are guided down about 10% for the year.
    Deere & Company third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - net income, segment results, the industry and segment outlook for fiscal 2026 and net income guidance of $4.75-5.00 billion. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  6. ReportedDeere's equity stake and guarantees in the Brazilian bank are smaller than before, but its factories at Montenegro and Indaiatuba still depend on local demand.
    Deere & Company Form 10-K for fiscal 2025 (year ended 2 November 2025), $ millions - Financial Services: John Deere Capital Corporation, financing receivables, credit quality, interest-free periods, the support agreement and Banco John Deere. — FY2025 · publ. 18 December 2025 · source ↗
  7. ReportedManagement said on the call that, with fourth-quarter order books closed, it is producing slightly less than retail demand in the region, which protects dealers from excess inventory going into fiscal 2027 at the cost of lower factory utilisation now.
    Deere & Company third-quarter fiscal 2026 earnings call, FactSet corrected transcript - engaged and highly engaged acres, See & Spray adoption, early order programs, construction backlogs, tariffs, equipment cash flow guidance and the FTC settlement - outlook, early order programs, construction backlogs, tariffs, cash flow and the FTC settlement. — Q3 FY2026 · publ. 20 August 2026 · source ↗
Sources
Generated October 5, 2026