Takeaways
- In reporting FY2025 Q3 earnings, John Deere’s small ag and turf division reported better than expected compact utility tractor shipments in North America.
- Production costs remained favorable in John Deere’s ag and turf segment due to a combination of factory efficiency gains and favorable material costs, according to the company’s investor communications manager Christopher Seibert.
John Deere provided its FY 2025 Q3 earnings report on Aug. 14. Specific to rural lifestyle dealers, Christopher Seibert, manager, investor communications at John Deere, offered an overview of the company’s small ag and turf segments.
Improvement in consumer confidence and favorable weather conditions were reflected in turf and compact utility tractor shipments in North America in 3Q 2025, after what Seibert characterized as a slow start to the year.
Seibert further reports that a combination of disciplined management, efficiency gains in its factories and favorable material costs led to production costs remaining favorable in its ag and turf business, even inclusive of tariffs.
Net sales for small ag and turf were reported to be down 1% year-over-year, totaling $3.025 billion in the third quarter. This, notes Seibert, was due to slightly lower shipment volumes, partially offset by currency translation and price realization.
“Operating profit declined slightly year-over-year to $485 million, leading to a 16% operating margin,” reports Seibert. “The decrease was primarily due to tariffs, partially offset by lower warranty expenses and lower production costs.”
Industry demand is now projected to be down 10% for small ag and turf in the U.S. and Canada. Seibert’s overview included an update on dairy and livestock fundamentals, which he says remain strong. At the same time, he notes, the high cost of expansion caused capital investments in the segment to remain muted.
“Soft consumer confidence and elevated interest rates continue to weigh on purchase decisions in turf and compact utility tractors,” says Seibert. “However, we saw improved sentiment and better-than-anticipated retail sales during the quarter, which supported our upward revision to the full year outlook.”
The global forecast for John Deere, as Seibert noted in his industry forecast included the following for FY 2025: U.S. and Canada large ag down 30%; Europe ag flat to down 5%; South America projected to be flat; and the outlook flat to up 5% in Asia.
