A $12 billion aid plan from President Donald Trump could benefit the farming sector, but also comes with a callout over prices that could put Deere & Company (NYSE:DE) and peers under the president’s careful watch.
Deere & Company Called Out
Trump announced details of the $12 billion farm aid on Monday during a Cabinet meeting. The aid aims to support farmers who have faced higher costs this year, which could be due to trade wars and tariffs.
The president said farming equipment companies will be able to "take off a lot of the environmental restrictions" currently placed on machinery, items that Trump and others said have made farming costs higher.
While this could be good news for Deere & Company, the president also sent a warning about prices for the farming equipment manufacturers.
"We're gonna say, ‘you're gonna reduce the prices.' They're gonna have to reduce their prices. Because farming equipment has gotten too expensive," Trump said.
The president said the $12 billion in aid will help farmers and continue efforts to lower food prices for American families.
Farmers will get their money in February with payments calculated based on planted acreage, production costs and other factors.
Trump said tariff revenue will help fund the aid for farmers.
Read Also: Trump’s Tariff Threat Could Hit John Deere Stock: Pro-Trump Congress Member Faces Potential Losses
Tariffs Put Hurt on Deere & Company
A call by the president to lower prices could be bad news for the struggling farm equipment maker, as the company already faces pressure from tariffs.
The company recently reported fourth quarter financial results with revenue and earnings per share each beating analyst estimates. This marked the 13th straight double beat from the company.
While that sounds like a huge positive, shares sold off after earnings due to weak guidance and tariff commentary.
Deere CEO John May said tariffs would cause "ongoing margin pressures" going forward.
The company guided for net income to decline by 5.5% to 20% year-over-year due to higher costs and tariffs.
Deere warned that the tariff impact could be $1.2 billion in fiscal 2026. Along with that direct tariff expense estimate, Deere cautioned that the company's new guidance includes "additional inflationary pressure also contemplated from the indirect impact of tariffs."
The tariff impact may be harder on Deere in the next fiscal year, with fiscal 2025 having around $600 million in direct expenses related to tariff costs.
The new farm aid bill would typically be a positive for a big farming company like Deere, which could see increased equipment purchases as farmers are in better financial shape.
Instead, it could prove to be a negative with the company now being watched for rising prices, an item it may have been able to do to offset rising tariff expenses.
Deere Stock Price Action
Deere shares trade at $466.21 on Tuesday versus a 52-week trading range of $403.01 to $533.78. Deere shares are up 10% year-to-date in 2025.
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Image created using artificial intelligence via Gemini.
