Deere & Co. stock hit another 52-week high Thursday as investors responded favorably to the ag-equipment giant’s quarterly earnings, revenue and full fiscal-year forecast. The question for farmers is whether that optimism translates to a better outlook at the producer level.
Shares closed with a gain of more than 11% Thursday afternoon. Deere reported earnings per share of $2.42 from equipment sales of $8 billion. Wall Street analysts had forecast earnings per share of about $2, driven by $7.6 billion in machinery sales. A year ago, Deere reported earnings per share of $3.19 from equipment sales of $6.8 billion.
Deere also raised its net income guidance for fiscal 2026 to a range of $4.5 billion to $5 billion from its previous forecast of $4 billion to $4.75 billion. It earned around $5 billion in fiscal 2025.
- “While the global large agriculture industry continues to experience challenges, we’re encouraged by the ongoing recovery in demand within both the construction and small agriculture segments,” said CEO John May. “These positive developments reinforce our belief that 2026 represents the bottom of the current cycle and provides us with a strong foundation for accelerated growth going forward.”
Barron’s noted recent commentary from Baird analyst Mig Dobre, who wrote that “2026 will mark a cyclical bottom in North American Large Ag equipment demand with volumes set for multi-decade lows.” Dobre, however, worried that a rally that’s seen shares rise nearly 30% from a November low could indicate investors are getting ahead of themselves in forecasting a recovery. After all, farmers aren’t breaking even on corn and soybeans at current prices.
Indeed, USDA has forecast net farm income to fall for a fourth straight year in 2026 despite a 45% jump in direct government payments. Nonetheless, market participants appear confident the worst will soon be over.
“Investors can see a bottom in the farming cycle,” wrote Barron’s.
Let’s hope so.
‘10-day’ warning on Iran?: WTI and Brent crude each gained 1.9% Thursday to settle at $66.43 and $71.96 a barrel, respectively, their highest since summer after President Donald Trump said the U.S. would determine its next moves within 10 days if Iran doesn’t agree to a nuclear deal.
The rally in crude helped give a lift to soybean oil and soybean futures.
“Bad things will happen” if Iran doesn’t make a deal, Trump told dignitaries at a Board of Peace gathering about Gaza, according to the Wall Street Journal. “We may have to take it a step further or we may not. Maybe we are going to make a deal. You are going to be finding out over the next probably 10 days.”
Oil has rallied on fears that a conflict could meaningfully crimp flows of crude from the region. Iran earlier this week partially closed the Strait of Hormuz, a global petroleum transportation bottleneck, as it staged exercises. Oil flow through the strait averaged 20 million barrels per day in 2024, or about 20% of global petroleum liquids consumption, according to the EIA.
- A potentially “severe” blow to global fertilizer markets: But a closure of the crucial waterway would also hold direct implications for agriculture. In particular, the impact on global fertilizer markets would be “severe,” analysts at Rabobank warned in a paper last summer.
“The nitrogen complex, and urea in particular, would bear the brunt, given the scale of the region’s importance to global exports (45% of all urea exports come from this region) and the interdependencies of other nutrients, such as MAP and DAP, which use ammonia for production,” they wrote.
But the potential impacts could run much deeper, they warned, “hitting global sulfur and phosphate prices and further testing the cost structure of growers globally.”
Potash demand hopes: Canada-based Nutrien, the world’s top potash producer, said Thursday it expects increased demand for the crucial crop nutrient in 2026 even with farmers cutting back on phosphate fertilizer and facing low returns, Reuters reported.
On its fourth-quarter financial results conference call, the Canadian company said it expects potash demand to rise due to large crops in 2025, reduced autumn application in the U.S., and potash’s low cost relative to other fertilizers.
- Nutrien CEO Ken Seitz said North American potash sales will be “driven by the need to replenish soil nutrients following a record crop and a shortened fall application window.
- Favorable weather in Australia is expected to encourage farmers to buy potash, he said.
- Brazil sales will likely continue to be hampered by low profitability, the CEO said, with growers delaying purchases for as long as possible.
‘Tapped out’: Food Dive notes that U.S. food manufacturers are warning of a prolonged spending downturn, with inflation and geopolitical uncertainty weighing on cash-strapped grocery shoppers. The report said that after several years of inflation-driven price increases, consumers appear “tapped out.” Despite investments in innovation, marketing and packaging changes, manufacturers say shoppers haven’t returned at the level they had expected.
- “I am worried about the U.S. consumer,” Dirk Van de Put, Mondelēz International’s CEO, told Food Dive in an interview at the Consumer Analyst Group of New York Conference. “I don’t see how anything will change until the disposable income of the consumer goes up or cost starts to go down in a big way.”
Port damage: Strikes by Russia on Ukraine’s Odessa ports in recent months have reduced their export capacity by up to 30% from their pre-war level, Reuters reported, citing a source in the transport industry. The report said the decline in capacity hasn’t affected overall export volumes because shipments are significantly lower than pre-war levels due to the impact of the conflict on production. The attacks on port infrastructure, however, triggered a jump in logistics and freight costs, hurting local businesses and forcing them to lower prices to remain competitive on the global market, the producers and a business lobby said.
- Agricultural products account for over 50% of Ukraine’s total export revenues, Deputy Economy Minister Taras Vysotskiy said, according to the report, amounting to nearly $23 billion last year.
- Officials said the overall volume of farm exports dropped last year mostly due to a smaller grain harvest and delays in corn harvesting caused by unfavourable weather, but attacks on infrastructure disrupted the timing of exports.
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