After DEI Disaster, John Deere

Illinois-based John Deere said a deepening farm slump has led to a drop in demand for its agricultural equipment, triggering a new round of layoffs across multiple US-based tractor factories. This also comes as Deere pulled back on disastours diversity, equity, and inclusion initiatives following conservative backlash and boycotts. 

Local media outlet De Moine Register reported a new round of layoffs will total about 287 workers from two Deere factories.

Deere executives were kind enough not to fire the workers before Christmas because doing so would have been a PR nightmare. The layoffs are concentrated at its Harvester Works factory in East Moline, Illinois, and just a handful of layoffs at its Cylinder operations in Moline, Illinois.

Another local media outlet, KWQC, received a statement from Deere explaining that the layoffs were not the result of shifting production to other plants but instead due to a worsening farm economy.

Bloomberg quoted the company:

"It is important to note these layoffs are due to reduced demand for the products produced at these facilities.

"As we have repeatedly stated, layoffs this fiscal year are due to the weakening farm economy."

Demand for tractors and combines has tumbled since crop prices dropped, borrowing costs remained elevated, and inflation continues eroding farmer margins. 

In late September, former President Trump threatened Deere with tariffs on its tractors and farm equipment if it outsourced manufacturing to Mexico. 

"I just noticed behind me John Deere tractors. I know a lot about John Deere, I love the company," Trump told farmers at a recent rally in Pennsylvania. 

Trump continued:

"But as you know, they announced a few days ago that they're going to move a lot of their manufacturing business to Mexico.

"I'm just notifying John Deere right now, if you do that, we're putting a 200 percent tariff on everything you want to sell into the United States, so that if I win John Deere is going to be paying a 200 percent — they haven't started it yet. Maybe they haven't even made the final decision yet. But I think they have."

Well before Trump put Deere on notice, the company laid off approximately 600 staff members at plants in Illinois and Iowa. Months before that, the company laid off 2,600 workers across plants in Ankeny, Dubuque, Ottumwa, Waterloo and the Quad Cities' Davenport and East Moline. Even some of its white-collar workers in Johnston and Dubuque were not spared.  

In combination with the farm slump, DEI backlash hit Deere this summer, forcing it to abandon "cultural awareness parades" and scale back on promoting a "woke" workplace for employees. A number of other US companies, including Caterpillar Ford, Harley, and others, dialed back or nuked DEI policies. 

At the start of October, a new reading from the Purdue University-CME Group Ag Economy Barometer Index showed plunging farm sentiment across the Heartland, hitting levels not seen since 2016.

"These were the weakest barometer and future expectations readings since March 2016, when the farm economy was in the throes of an economic downturn," James Mintert and Michael Langemeier of the Purdue Center for Commercial Agriculture wrote in the report. 

In a separate note, researchers at the University of Missouri forecasted that farm income will plunge 35% next year, compared to a high in 2022. The good news is that incomes are above what farmers made in 2015-20, yet the drop is steep, given elevated input costs. 

"Farmers will have a tighter situation … than they experienced in the last three years, and they'll have to be much more cognizant about having a very strategic marketing plan in order to make a good cash flow," said Bob Maltsburger, a senior research economist at the Food & Agricultural Policy Research Institute at the university.

It seems like farmers... want Trump back.

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