The Des Moines Register's Kevin Baskins recently brought to light the ongoing layoffs at John Deere. The agricultural and construction equipment giant announced another round of layoffs at its Waterloo Works, the company's largest plant. According to the state's Worker Adjustment and Retraining Notification (WARN) website, 112 workers will be laid off effective January 5th. This marks the sixth layoff by Deere in Waterloo in 2024, with a total of 1,075 workers cut so far. In Iowa alone, John Deere has shed 1,702 jobs at its various plants and offices in 2024. Additionally, 103 workers at the Ottumwa plant were offered early retirement in June.

Deere's Production Cuts Amidst a Difficult Agricultural Economy

Agriculture Dive's Nathan Owens reported that Deere has been aggressively cutting production of its tractors. The demand for new farm equipment has stalled due to a difficult agricultural economy. As stated in a Deere spokesperson's statement, "Challenging market conditions continue to result in reduced demand for our equipment. To remain globally competitive, we must continue making workforce adjustments as needed to our manufacturing footprint." With high interest rates, low farm incomes, and weak commodity prices, borrowers are postponing large purchases, making it challenging for tractor dealers to move their inventory. Sales of construction equipment have also decreased as fewer families are buying new homes.

John Deere's Plans to Move Production to Mexico

AgDaily reported that John Deere has faced public criticism over its plans to move some production to Mexico by 2026. Despite insisting that current layoffs are unrelated to production moves, some former employees are exploring wrongful termination lawsuits, citing age discrimination cases. This has added another layer of complexity to the company's situation.

Farmer Sentiment Despite the Ag Economy Downturn

Despite the ag industry downturn contributing to many layoffs, Purdue's Ag Economy Barometer reported that farmer sentiment jumped again in November. The Purdue University/CME Group Ag Economy Barometer climbed 30 points to a reading of 145, marking the highest level of farmer optimism since May 2021. Driven by considerable gains in both the Current Conditions and Future Expectations indices, farmers reported a more positive outlook for their operations and the broader agricultural economy. The percentage of producers expecting their farm's financial performance to improve over the next year climbed to 33% from 19% in October. Optimism about the U.S. agricultural sector also surged, with 34% of farmers anticipating good times financially in the next 12 months, more than double October's 15%. Looking ahead five years, over half of November's respondents (52%) predicted widespread prosperity for U.S. agriculture, a notable increase from 34% the previous month. This growing confidence was also reflected in farmers' investment plans, with 22% reporting that it's a good time for large capital investments compared to 15% in October.