Deere & Company: Shaping the Future of Agriculture Since 1837

In many ways, the story of Deere & Company and that of American agriculture go hand in hand. The company that John Deere founded in 1837 in rural Illinois has gone from selling basic plows operated by horses and humans in tandem, to complex machinery that has taken the precision of farming to levels that were previously unimaginable. However, one thing has remained the same throughout the decades: the focus on improving and perfecting the processes of agriculture. Join us for a journey through Deere & Company's history and philosophy from the 1800s to today, and we promise you're going to learn a thing or two about farming as well.

• Decades and decades of history: Deere & Company has plenty of heritage, and its history goes hand in hand with the progress of agricultural equipment.

• Improving and expanding: Many of the products that have made Deere & Company successful haven't been invented by them – instead, they've expanded and improved on already existing concepts and marketed these well.

• Market share: Deere & Company is the largest producer of agriculture equipment globally, and dominates the U.S. domestic market.

• Not just farming: While Deere & Company is most famous for its agriculture equipment, the company is also active in forestry, industry, and financial services.

• Precision agriculture experts: The company is a leader in precision agriculture, with some of its tech appearing to be straight out of science fiction.

Before we start the story, we need to take the opportunity to clarify one thing that might cause confusion further down the line – the name. A common (and fully understandable) misconception is that the company's name is John Deere when it is in fact Deere & Company.

The Deere & Company of today acts as a conglomerate that owns and operates roughly 25 different brands, of which John Deere is by far the largest and most famous. The brands owned and operated under the Deere & Company umbrella are all active in agriculture, forestry, and construction in one form or another. Below, you can see a visual representation of the Deere & Company family of brands and how much each business arm contributes to total revenue:

Deere & Company’s revenue by business segment, 2023 annual report.

Deere & Company’s revenue by business segment, 2023 annual report.

Our story begins over 185 years ago. Illinois had been a state for only 16 years and the American Midwest was undergoing transformative changes. What would eventually be known as America's breadbasket was blessed with incredibly fertile soil, attracting farmers from the East Coast. Settlers migrated to Illinois and beyond to make a living through agriculture, attracted by the conditions of the land and the promise of stability, far removed from the uncertain economic realities of New England and the rest of the coast.

But to farm, one needs equipment.

This is where John Deere enters the picture. What we know today as a massive agriculture technology company worth north of $100 billion started as a rural farm shop in Grand Detour, Illinois in 1837. Like so many others at the time, our story's protagonist had moved to Illinois from Vermont.

Back in New England, he had been a well-respected and established blacksmith in his local community, but money problems and a looming bankruptcy spurred him to move westward. Just like the outfitters selling picks and shovels to hopeful prospectors during the California Gold Rush in the coming decades, John Deere wouldn't attempt to make his fortune on the resources offered by the region. Instead, he would supply and support those who did. This, as it would turn out, proved to be a very wise decision.

During the early days of his small shop, John Deere both sold and repaired basic farming equipment and quickly became an important part of the local community. Farming causes plenty of wear and tear on equipment and Deere had no trouble finding work. Keen to provide the best possible products for his customers, he was inquisitive and frequently chatted about issues farmers in Grand Junction and the surrounding area were facing. Almost all of them responded with the same answer: the clumping of soil on their plows.

Most farmers at the time used plows made out of cast iron attached to horses or oxen to prepare their fields for planting. While this worked well in the sandy and loose ground on the East Coast, it was woefully inefficient in the rich, sticky, and rooty soil of the Midwest. Farmers had to regularly stop and clean the blades of their plows, costing time and causing great annoyance.

So John Deere set to work. He'd heard of plows made from polished steel instead of cast iron and decided to give it a try, hypothesizing that the soil would flow off the shining plow blades. He polished the steel of a broken saw blade and attached it to a plow.

The difference was striking. The polished steel cut through the Illinois prairie soil without clumping up on the blade, and Deere knew that he had a potential goldmine on his hands. After having proved what the polished steel plow was capable of to a large group of intrigued farmers, the small workshop was inundated with orders. John Deere had done something that would go on to become recurring throughout the company's history: taking something that already existed, improving and expanding upon it, and marketing it well to a group of customers that was in need of an upgrade.

The plow became a must-have for farmers in the region, and John Deere's small rural workshop was soon producing plows as fast as they possibly could. The plow drastically reduced the time and labor required to get a field ready for planting, and Deere continually updated and refined the design based on feedback from his customers. By listening to the farmers who depended on his equipment for their livelihood, and adapting it to their needs, he gained a reputation as someone who created reliable and high-quality products.

The revolutionary plow, perfectly suited for the tough midwestern soil.

The revolutionary plow, perfectly suited for the tough midwestern soil.

During this time period, America was expanding westward as fast as it could, and while it would be disingenuous to say that John Deere's plow was the only thing that enabled that expansion, it certainly helped. The midwestern soil which had irritated and worked against farmers for years had finally met its match, and soon the production had outgrown Grand Detour. John Deere knew he had a winner on his hands, and it was time to scale up operations. In 1848, he once again packed up himself, his family, and his business and moved west.

But compared to his first relocation from Vermont he wasn't moving very far. John Deere moved to Moline, about an hour and a half west of Grand Detour. Moline sits right on the border with Iowa, which had gotten its statehood just two years prior. It was bustling with activity and acted as an important logistics hub for the ever-growing U.S. continental expansion. In Moline, there was plenty of space to expand and labor to hire. The space and manpower were needed, but the town offered other advantages as well: it was located on the banks of the Mississippi River and was connected to the quickly expanding railroad network.

Deere set up a partnership with two associates in 1848, and the following year a state-of-the-art workshop and production facility was opened. Plow production nearly doubled as the facilities drastically improved, and the connection to the railways and barges on the Mississippi made the distribution of his plows across the Midwest much easier.

Deere & Company still has its global headquarters in Moline.

In 1852, Deere split up with his previous associates and was now the sole proprietor of his workshop. In the following years, he would expand his operations massively, continuing to produce the plows that had been the key driver of his success so far, but also starting to branch out. From his workshop in Moline, he and his employees produced cultivators, planters, and a host of other vital farming equipment, which was then sold all across the Midwest.

In 1858, John Deere's son Charles took over the day-to-day operations from his father. He would act as the CEO for the next 40 years, and for the coming century, a member of the family would be the head of the company. The business was renamed to Deere & Company in 1868, a name it still holds to this day.

Due to the decades and decades of history surrounding Deere & Company, we must now make a little leap in time to continue our story. More precisely, we're jumping forward to the advent of the gas-powered tractor in the 1910s. During this 40-year time-hop we're taking, Deere & Company will continue to expand and modernize its product line, while maintaining its reputation of being a producer of high-quality and reliable equipment.

Steam-powered tractors had seen some limited use in the late 1800s, but were expensive to buy and complicated to operate, and were therefore out of reach for most farmers. But when gas-powered tractors entered the market, a miniature revolution in agriculture began. These tractors did come with a high startup cost, but made up for it many times over with the increase in productivity they brought.

Deere & Company, ever interested in the newest technological leaps within its field, naturally tried to get in on the action. They were already producing various equipment that could be used with tractors, but in order to not be left behind they started developing their own during the early 1900s, and in 1912 the first John Deere tractor hit the market.

Unlike the introduction of the polished steel plow, the tractor was far from a commercial success. While it worked well and performed its tasks without issue, it was far too expensive to compete with the other offerings available to farmers at the time. The first John Deere tractor cost nearly twice as much as equivalent offerings from other manufacturers and due to this, it was more or less dead on arrival.

But tractors were, in every sense of the word, the future, and the management at Deere & Company was highly aware of this fact. Instead of continuing to invest heavily into the development of its own tractor, it went down a faster and much more direct route: it purchased its top competitor.

Deere & Company acquired the Waterloo Gasoline Company in 1918, and just three years later, they had produced over 5,000 tractors. The Waterloo Boy, as the tractor was called, became a massive commercial success and Deere & Company had once again found themselves at the forefront of developments. Just like with the polished steel plow, it didn't invent the latest and greatest in agriculture technology. Instead, they had identified the most important step for the future of farming, improved on current versions, and marketed it well.

So far in this story, we've remained focused on what most people immediately associate Deere & Company with – agriculture. We're going to continue with that for the majority of this article, but it's important to be aware of the fact that forestry and industrial equipment have been (and continue to be) an important part of Deere & Company's operations, making up for 24% of its revenue in 2023.

Deere & Company first ventured into the construction equipment market in the mid-20th century. In 1956, the company launched its industrial division, a move intended to capitalize on the booming post-war construction industry. The market demand was sky-high, and Deere & Company aimed to meet it by offering machinery such as bulldozers, loaders, and backhoes. One of its initial offerings was a crawler designed for industrial use, which laid the groundwork for future models in the construction line. The company continued to develop specialized machinery for tasks like earthmoving, trenching, and material handling, gradually expanding its footprint in the construction industry.

Its debut in the forestry equipment sector came later, following a similar trajectory of diversification. The company began by adapting its existing machinery, such as crawlers and skidders, to meet the demands of the forestry industry.

In 1970, John Deere introduced its first purpose-built forestry skidder, which marked its serious entry into this market. Over time, the company developed a range of equipment for logging and other forestry tasks, including feller bunchers, harvesters, and forwarders. John Deere's expansion in forestry and construction has in large part been made possible through acquisitions and partnerships. For instance, the 1988 acquisition of Timberjack, a Canadian forestry equipment company, allowed it to quickly gain a foothold in the forestry market by taking over an established brand with a reputation for reliability.

In construction, John Deere has partnered with other companies to expand its product line and reach. A longstanding joint venture with Hitachi Construction Machinery allowed Deere & Company to co-produce and distribute excavators, enabling the company to offer a broader selection of equipment without building everything from scratch. This partnership was concluded in 2022, with Deere & Company acquiring several factories that were previously jointly owned. Today, it instead has numerous license and supply agreements with Hitachi.

In terms of product offerings, Deere & Company now provides a wide array of equipment for both forestry and construction. Its forestry lineup includes everything from swing machines to wheeled harvesters. In construction, it offers compact, mid-size, and large equipment, ranging from skid steers and compact track loaders to larger dozers and articulated dump trucks. Overall, forestry and construction equipment has become an important part of Deere & Company's approach. These sectors have allowed Deere & Company to reduce its reliance on the sometimes volatile agricultural markets.

Deere & Company was primarily focused on the agricultural market throughout the first half of the 20th century. However, the company was keen to take its reputation for durable and high-quality products to a broader range of consumers. One of its earliest ventures into the general consumer market was the introduction of lawn tractors in the 1960s. These models, such as the iconic John Deere 110, became a popular choice amongst homeowners. Following this initial success, it started to produce everything from bicycles to skiing equipment, yet struggled to gain traction for these alternative product lines.

Today, John Deere continues to offer products aimed at regular consumers, albeit at a smaller scale than what they used to. Their lineup includes mowers, garden tractors, and residential zero-turn mowers. In addition to mowers, John Deere also offers compact utility tractors and Gator Utility Vehicles. In addition to this, one can find items such as compressors, pressure washers, toolkits, and similar items in its product lineup.

After that slight detour, we've now arrived in 1960, and between where we left off and the start of the '60s, the company has expanded and grown its line of products and slowly but surely started capturing more and more market share in the U.S. While it was relatively popular domestically, throughout the decades Deere & Company had remained as the second largest dog in the fight for supremacy over the global agricultural equipment market. In 1960, it unveiled four new models of 4 and 6-cylinder tractors in Dallas. These tractors came at a pivotal time, as its line of 2-cylinder tractors were starting to become obsolete and the introduction of the new models came at a perfect time – in more ways than one.

Between the turn of the century and the early years of the '60s, the largest player in the sector was called International Harvester (IH) and Deere & Company was constantly the runner-up. However, IH started to experience financial difficulties at the start of the decade, and the company from Moline didn't rest on the trigger. Armed with a new lineup of state-of-the-art tractors and with a struggling competitor, Deere & Company was poised to take the lead.

It only took three years from the reveal of the new lineup of tractors, showcased to industry representatives in a Texas showroom, for Deere & Company to become the global leader in agricultural equipment. IH would continue to see its market share slowly but surely drown in green and yellow while its margins remained paper thin. It would continue to fight an uphill battle against the likes of Ford, Massey Ferguson (now part of AGCO), and Deere & Company throughout the '70s. IH went through a reorganization, and after selling a number of its business arms and merging what was left with Tenneco, it effectively ceased to exist.

After the demise of IH, Deere & company became the largest producer of agriculture equipment in the U.S. This is a title the Moline company has held since then.

We’re once again going to take a small break in our storytelling to go over the three things that most people immediately associate John Deere with: the iconic triumvirate of the logo, the slogan, and last but not least, the color scheme.

Saying that agriculture has gone through large transformations from the time of the company’s founding would, to say the least, be an understatement. However, the logo of Deere & Company has remained largely unchanged. The first logo featured the now iconic jumping deer since the 1870s. Back then, patent infringement and copycats had started to become a real threat to Deere & Company and its products.

Thus, the company registered the trademark in 1876 (yes, that means that there were roughly 40 years of operation without a registered trademark), and it has since been modernized a number of times throughout the years. But as previously mentioned the core design ideas and components of the logo are the same as they were back then, featuring a jumping deer together with the words “John Deere”.

The logo currently in use was updated in 2000 featuring, for the first time, a deer at the beginning of a leap rather than a landing. While this might be enough to win you a round of business trivia, there's one more interesting tidbit that illustrates just how much heritage the John Deere logo carries: its trademark is the oldest still in use by any Fortune 500 company.

John Deere’s first-ever logo – and the one currently in use.

John Deere’s first-ever logo – and the one currently in use.

The origin of John Deere's color scheme dates back to the early 20th century when the company was expanding its product line. By adopting a consistent and distinctive color scheme, John Deere was able to establish strong brand recognition as consumers were able to immediately spot which equipment came from Moline. The company officially started using the iconic green and yellow color combination around 1910 for its equipment, and it has remained largely unchanged since then. This color choice helped set Deere & Company apart from competitors, most notably International Harvester, whose machines were predominantly red.

The green and yellow colors also serve practical purposes beyond brand recognition. The green helps machinery blend into agricultural fields, reducing the visual impact on the landscape. The yellow, usually found on the wheels or trim, provides a striking contrast that improves visibility, helping operators and workers spot machinery more easily even in low visibility conditions. This combination of symbolic, practical, and branding elements has solidified the green and yellow color scheme as a key part of Deere & Company's identity and is instantly recognizable even from afar.

When talking about Deere & Company and its identity in the way we’re doing in this article, it’s easy to start overusing the word “Iconic”. An icon of American agriculture, with an iconic logo, an iconic color scheme, and iconic products. The list goes on, and if we wanted to we could continue to list things that were iconic until we run out of digital inc. So instead of describing why the company's slogan 'Nothing runs like a Deere' is iconic (which it is), we're simply going to tell the story of how it came to be.

While the logo can be traced back roughly 150 years, the same can't be said for the slogan. In 1972, John Deere debuted its new line of snowmobiles (yes, John Deere once made snowmobiles) and was in need of a tagline to go with them. Bob Wright, a copywriter at the advertising agency hired to come up with the said tagline, had trouble finding something that felt right.

Wright had worked on the marketing for snowmobile helmets, a somewhat obscure product lineup that saw both limited attention and success, and realized something. The slogan 'Nothing runs as a Deere' had been used as a tagline for the line of helmets, and might just be the perfect fit for the new line of snowmobiles. He showed it to the marketing executives at Deere & Company, who loved it. While the snowmobile line was decommissioned in the early 80s, the tagline stuck and has since been used to market everything from combines to lawnmowers.

A vintage John Deere “Nothing Runs Like a Deere” belt buckle.

A vintage John Deere “Nothing Runs Like a Deere” belt buckle.

As our telling of the story enters the 90s, things are about to get even more interesting – we're entering the dawn of digital and precision agriculture. To tell the story of how Deere became the pioneers, and eventually leaders in the field, we must first describe one of the problems that the company's engineers set out to fix. If you're a farmer or well-versed in agronomy, you can skip the next paragraph. But if you, like us, have spent more time in front of annual reports than in the seat of a tractor, we encourage you to keep reading.

The issue (more specifically, the product developed to fix the issue) that would propel Deere & Company into the digital age of farming was an old one: overlapping. This refers to the practice of extending the application area of equipment – such as seeders, sprayers, or fertilizer spreaders – beyond the already treated section of a field. This typically happens when a machine passes over an area that has already been covered to ensure complete coverage and avoid missed spots.

Overlapping is difficult to avoid, as the alternative for a farmer is to risk leaving parts of their field untreated, thereby hurting the bottom line once it’s time to harvest. This in turn leads to many farmers instead choosing to play it safe and going over sections of their farm twice, causing what is known as overlapping. However, excessive overlapping can lead to resource wastage, as too much seed, fertilizer, or pesticide might be applied to the same area, increasing costs and potentially harming crops or the environment.

In 1995, Rockwell International (now part of Boeing) launched the last satellite it needed to provide global GPS coverage, and it got the engineers at John Deere incredibly excited. While GPS had a number of applications ahead of it the U.S. government, who’d contracted Rockwell to build the system, primarily had military use in mind.

However, the engineers in Moline saw the possibility of using the technology for slightly more peaceful endeavors. The engineers at Deere & Company realized that provided that the GPS was accurate enough, it would be able to provide farmers with information on where they had already treated their fields, thereby decreasing the risk of overlapping. But compared to the GPS systems of today, the first version was nowhere near being accurate enough. Sure, it could help pinpoint where a battlecruiser was within a couple of meters of certainty (which is fine when what you’re trying to locate is the size of an apartment building), but it wasn't accurate enough for the applications that Deere & Company had in mind.

So they set out to fix it. Just like with the stainless steel plow and the tractor, they wouldn't invent something from the ground up. They were going to take technology that already existed, improve upon it, and market it well to a group of customers who needed it.

John Deere's engineers reached out to Stanford University and NASA, and together they decided to develop a Differential Global Positioning System (dGPS) – an enhanced GPS system that improves the accuracy and reliability of position data. It works by using a network of fixed ground-based reference stations that compare the GPS satellite signals with the known precise locations of the stations. Without getting too bogged down in the technical specifications of how GPS systems work, it made the technology viable for use in agriculture.

The system would go on to debut in 1998 under the name StarFire, and it took the agriculture industry by storm. The system was accurate within one meter and soon became incredibly popular. StarFire 2 was introduced in 2004 and took things to the next level. Instead of being accurate within one meter, it could now provide accurate localization within just 4.5 centimeters. Precision agriculture had well and truly arrived, and it was here to stay. The StarFire system is now on its third iteration and is even more accurate, with faster response times.

We’ve now reached the modern day, and our narrative is going to shift over from the Deere & Company of the past to the present day. As we've already been over, we've entered the age of digital agriculture and precision farming. At its core, this is about finding ways to be more efficient with resources, allocating expensive commodities such as fertilizer, insecticide, and seed as effectively as possible. While farmers have always sought efficiency, today's precision technologies allow them to go into such minute detail in everything they do that John Deere himself, more than likely, wouldn't have believed you.

We're going to go into more detail about how Deere & Company has become a leader in precision agriculture and how it's now a critical part of its competitive advantage against its peers later on, we're first going to take the time to go into a little more depth. Modern John Deere machines such as tractors, sprayers, combines, and the like, are equipped with sensors that constantly collect field data, creating a continuous feedback loop that helps farmers make more informed decisions.

This eliminates much of the guesswork that has been an unavoidable part of agriculture for centuries, instead allowing the farmer in question to analyze the data in detail and make the best possible decision they can from it.

A data-centric approach like this transforms farming into a high-tech, data-driven process, enabling farmers to pinpoint exactly where resources are most needed. In traditional farming, a one-size-fits-all approach is applied across every acre, regardless of the soil type or crop needs. This means the same quantities of fertilizer, seed, and chemicals were spread across both high-yield and low-yield areas, potentially wasting resources in areas where they weren’t needed. Using real-time data from sensors and aerial imaging, farmers can identify zones within their fields that vary in productivity. This allows them to allocate more fertilizer as needed, and conserve resources in less productive zones. As a result, farmers optimize their input costs and reduce waste, leading to increased yields and improved soil health over time.

Precision agriculture isn't just about cutting costs; it also plays a role in advancing sustainable farming. By using less water, fewer chemicals, and fewer fertilizers, farmers reduce their environmental footprint. This approach also mitigates soil degradation and helps protect local water sources from agricultural runoff.

Now that you’ve been given the rundown of what precision agriculture is, we're going to take the opportunity to give some examples of the technology that enables it. To list all examples of this would be too large a task, so instead we've chosen two examples besides StarFire that we find exciting.

While there are numerous examples of cutting-edge precision farming products from John Deere, the most famous (and arguably, the coolest) is See and Spray. The system operates using cameras and sensors mounted on the sprayer booms. These sensors scan the field and, through AI algorithms, identify and differentiate weeds from crops. When weeds are detected, the system triggers a precise spray of herbicide, targeting only the unwanted plants. John Deere offers two versions of this technology: See & Spray Select, which identifies green plants in fallow fields, and See & Spray Ultimate, which is capable of distinguishing specific weed species from crops in row-crop fields.

In traditional farming, sprayers blanket entire fields, applying pesticides or fertilizers evenly across the crop, regardless of each plant's condition. This can lead to excessive chemical use, higher costs, and unnecessary environmental impact. Deere's precision sprayers, however, take a radically different approach: they target only the plants that show signs of disease or pest infestation. By treating only the affected plants, farmers can cut product costs by up to 70%, significantly improving cost efficiency while minimizing chemical use – a win for both the farmer's bottom line and the environment.

John Deere’s See and Spray technology.

John Deere’s See and Spray technology.

The HarvestLab 3000 is an advanced sensor system used to analyze crop quality in real-time during the harvest process. The system is compatible with various John Deere equipment, providing precise measurements that help farmers make informed decisions to improve both crop yield and quality. Using near-infrared (NIR) spectroscopy, it can accurately analyze components such as moisture, protein, fiber, sugar, and starch content in crops like corn, alfalfa, and grass silage.

This real-time data is displayed on the harvester's monitor, allowing operators to instantly adjust the harvesting process to optimize quality based on the crop's current characteristics. In addition to crop analysis, the HarvestLab 3000 can be mounted on slurry equipment to evaluate the nutrient content of manure, including nitrogen, phosphorus, and potassium levels. When used together with the John Deere Operations Center (more on that in a bit), it makes it possible for a farmer to apply just the right concentration of nutrients for a specific field.

But with this much software and technology now being used in farming, there is a need for oversight. All of the aforementioned technology such as See and Spray, HarvestLab 3000, StarFire, and numerous others that we haven't been over can all be connected to the John Deere Operations Center. It is a cloud-based farm management platform that enables farmers to optimize their agricultural operations through data-driven insights. By integrating information from John Deere equipment and other data sources, the platform provides a centralized location for planning, monitoring, and analyzing farm activities.

Through the Operations Center, farmers can access real-time information on machinery performance, field operations, and crop health, facilitating informed decision-making. It enables precision agriculture through prescriptions for planting, fertilizing, and spraying, which can then be sent directly to compatible equipment. It also enables connectivity across devices and systems, allowing data sharing between machinery and other farm management tools.

This helps farmers coordinate activities, monitor equipment utilization, and track maintenance needs remotely. Additionally, the platform includes tools for analyzing historical data and generating reports, providing an overview of farm performance over time. All in all, the Operations Center acts as the central nervous system of a farm utilizing precision agriculture equipment.

Although the company saw financial issues in the 80s, Deere & Company has done well throughout the last three decades. Its agriculture division has the highest margin out of all its business arms, and more than 50% of its revenue comes from the U.S. We've chosen to visualize the company's EPS growth to highlight Deere & Company's performance over the last three decades. While the move into precision farming alone isn't enough to explain why the stock is up over 4000% since 1990, it has been a key growth driver.

Deere & Company’s impressive EPS growth over the last three decades.

Deere & Company’s impressive EPS growth over the last three decades.

Another aspect of Deere & Co’s success is the fact that the John Deere brand has built up and maintains an extraordinarily loyal customer base. Being an “All Green Farm” (only having equipment from John Deere) has long been a point of pride for many American farmers and is often something that consumers personally identify themselves with. The company also has a long-standing legacy of producing durable and high-quality machinery that farmers have come to trust. This emphasis on quality has been an integral part of its business strategy from the start, which has built a customer base that values both the longevity and quality of John Deere equipment.

One of the other key reasons for Deere & Company's success is its dealer and service network. While many fields rely on having equipment that works flawlessly at critical times, agriculture is one of the industries in which faulty hardware can have catastrophic consequences. Farmers are already reliant on the weather to plant and harvest their crops, and need their machines to work flawlessly.

When it's time, for example, to get their wheat harvested it needs to be done in a specific window of time in order to maximize yields. Assuming that the weather cooperates within the optimal harvesting days, farmers need to get out into the fields and get their crops out of the ground. As you might imagine, having a malfunctioning piece of equipment refusing to cooperate during these critical days is something that can mean a severe loss of profits.

This, in a roundabout way, also explains why so many American farmers choose to use equipment from John Deere more or less exclusively. They have, by far, the largest amounts of dealerships and service centers in the U.S., which means that the average farmer is much closer to a John Deere location than its closest competitors CNH or AGCO.

While this might not have been as much of a deciding factor in years past, the advent of precision agriculture and the ever-increasing complexity of farming equipment has compounded this effect. While a farmer might be able to replace a broken hydraulics pipe or amend a faulty switch by themselves, the same can not be said for hyper-modern equipment which is becoming more and more prevalent in agriculture operations.

The chances are slim to none that a farmer with no previous knowledge or training on how, for example, to replace and then re-calibrate the sensors on a smart sprayer will be able to do so in their garage. Being able to call John Deere in the evening and have someone come out first thing in the morning can mean the difference between being able to harvest at an optimal time, and risking being rained out.

But this also turns into yet another revenue stream for Deere & Company. While car companies like Porsche will always recommend their customers service their cars at official service centers, one is free to go and perform maintenance at an independent mechanic. But when a John Deere dealership is 1) on average, the closest option and 2) the only one with the expertise to fix more complex problems, the consumer is left with little to no choice as to where to turn.

But the reasons why one can find so many farms that are “All Green”, are multifaceted and also have a technical explanation – the John Deere ecosystem. In recent years, John Deere has moved towards marketing its products as, in their own words, solutions. A farmer no longer strictly buys a combine – they buy a harvesting solution.

While they're still buying the hardware, what they get (and in many ways, what they need) is so much more than that. They're getting the combine, but they're also getting a host of software and advanced technology to go with this. In a similar way to how, for example, Apple products interact and mold together to build an ecosystem for its users, utilizing only John Deere equipment allows each individual piece of equipment to work together to maximize output. All information is fed into the Operations Center and allows farmers to monitor things such as yield, moisture levels in their crops, soil health, the location of equipment, maintenance requirements, and much, much more.

But John Deere is also actively working with its customers to give them the best possible support and use of their products. For example, many large dealerships in North America have teams of agronomical experts at hand who can analyze the data from the Operations Center, and provide support and advice on how farmers can improve their operations.

When one takes all of these factors into consideration, it's easy to see why so many farmers choose to stick to John Deere. If they already have three pieces of green and yellow equipment, they have a good relationship with a nearby dealer, support is closeby, and agronomical expertise familiar with one's farm is provided, it’s easy to see why a farmer is more than likely to choose a new combine from John Deere.

But this also means that farmers are less likely to switch to a competitor, due to all of the sunk cost and time that they have invested with John Deere. Farming equipment is, to put it lightly, incredibly expensive (a tractor can cost upwards of $300,000) and while precision equipment does help to cut costs down, it works best when working with other equipment. By the time one has two or three expensive pieces of kit and has learned to use the Operations Center and the ecosystem to its full potential, making the switch is highly unlikely. This, in turn, leads to a huge competitive advantage for John Deere and makes competing with them very difficult.

However, making the transition to a solutions/technology company also comes with several commercial benefits. John Deere is now able to generate revenue not just from selling their equipment and from servicing, but also through the use of subscriptions and charging for software. In a similar manner to how one purchases a subscription to access Netflix, customers pay a subscription fee to use products such as StarFire and automation software, giving John Deere partly predictable revenue streams. Once a farmer has started using these systems and become accustomed to the benefits they bring, they're unlikely to churn.

Adding to this ecosystem is John Deere Financial Services. It provides financial solutions tailored primarily to the agricultural, construction, and forestry industries. It offers a range of financing options, including equipment loans, leases, and revolving credit accounts, to help customers acquire John Deere machinery and other related products.

One of the core offerings is equipment financing. This option enables customers to purchase new or used John Deere equipment through various plans, which can include low-interest loans, deferred payments, or leasing arrangements. Such options are designed to be flexible, accommodating the often seasonal cash flow patterns of those in agriculture and construction.

Another significant component is the company's revolving credit accounts, which provide farmers and contractors with the flexibility to cover ongoing operational expenses, such as parts, service, and maintenance for their equipment. These credit accounts are managed through John Deere's dealer network, and this is yet another reason why so many farmers choose to stick exclusively with John Deere: it's convenient, and they're experts in making sure that their customers have an experience which is as smooth and hassle-free as possible.

When there are sprayers equipped with cameras and sensors that are able to identify unhealthy crops and spray them while on the move might already seem futuristic enough, but it doesn’t stop there. While the future of autonomous driving still looks to be far from certain (although Tesla and Alphabet's Waymo are continuing to make technological leaps here), it seems increasingly likely that the future of farming is autonomous. John Deere has already introduced tractors with autonomous capability supported by its GPS systems, but at the time of writing this is still in its early stages.

However, Deere & Company is actively looking towards the future. In 2023 it invested roughly $2.2 Billion into R&D (up 13% compared to 2022), and is consistently making strategic acquisitions that align with its ever-increasing focus on digital and precision farming. Who knows, soon a field might be able to be cultivated, planted, sprayed, and harvested, all with little to no human interaction.

Besides the focus on autonomy, the company is investing heavily in other fields of robotics as well as machine learning. Just like in the past, Deere & Company is not afraid to acquire other companies when they see a benefit in doing so. Acquisitions in recent years have been focused on three things: autonomy, robotics, and AI.

But the forward-thinking doesn't stop there. Through its Startup Collaborator program, launched in 2019, John Deere works with early-stage companies to explore new ideas and solutions that align with its core areas of interest, such as precision agriculture, automation, and sustainability. The program allows startups to test their technology with John Deere's customers and dealers while giving Deere access to cutting-edge innovations.

All of these acquisitions, the ever-increasing spending in R&D, and the collaborations with startups are focused on the same goal: ensuring that John Deere continues to be the leader in digital and precision agriculture for many years to come.

Thank you for joining us on this journey through the history of Deere & Company and agricultural technology as a whole. We’ll leave you with a quote from John Deere himself, which we believe serves as a mantra to live by, no matter your profession: