How Deere & Company Is Reaping Rewards From Agricultural Automation and AI Innovation

The story of modern agriculture is one of remarkable efficiency gains. In the 18th century, four out of every five Americans worked the land. Today, less than 2% of the population feeds a nation of over 330 million. This transformation isn’t magic—it’s technology. And one venerable American manufacturer is reaping substantial benefits by leading the charge toward the next agricultural revolution.

Deere & Company (NYSE: DE), the 189-year-old farm equipment giant better known as John Deere, is demonstrating that age is no barrier to innovation. While competitors have struggled to adapt, Deere has invested billions in artificial intelligence, autonomous systems, and smart machinery. The company isn’t just manufacturing tractors and combine harvesters anymore—it’s fundamentally reshaping how farming gets done.

Smart Technology Delivers Real Results on the Farm

The transformation begins with a deceptively simple problem: weed control. Traditionally, farmers spray entire fields with chemicals, destroying weeds but also wasting water, polluting groundwater, and contaminating food systems. Deere’s solution employs 36 cameras and machine learning algorithms that identify individual weeds and apply pesticide only where needed.

The numbers speak for themselves. During 2023 testing on 1 million acres, this precision approach cut water and chemical consumption by 50%, reduced airborne chemical drift by 87%, and decreased chemical runoff by 93%. Farmers save money. The environment benefits. It’s exactly the kind of win-win outcome that drives investor interest.

The company is also advancing autonomous tractors equipped with 360-degree camera systems and sophisticated obstacle-detection software. A farmer simply transports the equipment to a field, configures it via smartphone, and monitors operations remotely—freeing up hours previously spent in the cab. As Deanna Kovar, Deere’s president of Worldwide Ag & Turf for Europe, Asia, and Africa, noted: farmers can now simply “swipe to farm” on their mobile devices.

Financial Performance: Strong Growth Despite Industry Headwinds

Deere’s financial trajectory reveals a company reaping the rewards of its innovation strategy. While 2025 presented challenges—net sales declined 12% and net income fell 29% year-over-year—this decline primarily reflects the company’s aggressive R&D spending, which hit $2.29 billion (5.1% of revenue). Most tellingly, Q4 2025 showed an 11% surge in net sales and revenue, signaling momentum entering 2026.

The company maintains an impressive 11% net income margin and has increased its dividend by 113% since 2020—a powerful indicator of sustainable profitability. This dividend growth trajectory demonstrates management confidence and shareholder-friendly capital allocation, even amid transition years.

The fundamental driver of Deere’s confidence is straightforward: global population will reach approximately 10 billion by 2050, requiring a 60-70% increase in agricultural production. Deere’s machinery and software solutions position the company as the essential infrastructure provider for meeting this demand.

Chemical Makers Face Existential Threat From Automation

The inverse of Deere’s success story unfolds in the struggles of FMC Corporation (NYSE: FMC), a manufacturer of pesticides, fungicides, and crop-protection chemicals. While Deere harvests growth from technological advancement, FMC’s results have deteriorated sharply.

Q3 2025 revealed the severity: revenue collapsed 49% from $1.02 billion to just $542 million. The company swung from a $66 million profit to a $569 million loss. Earnings per share deteriorated from $0.52 to a negative $4.52. The outlook is grimmer still—free cash flow projections show a $100 million loss in 2025, down from a $614 million positive position at 2024’s close.

FMC’s crisis isn’t cyclical; it’s structural. As Deere’s smart sprayers reduce pesticide application by 50%, demand for chemical products contracts accordingly. The company faces a market in which its core products are becoming obsolete. Management has no clear path to offset declining chemical volumes, making any near-term recovery improbable.

The Investment Takeaway: Technology Reshapes Sectors

The contrast between these two companies illuminates a fundamental investment principle: technological disruption creates clear winners and losers. Deere, by investing heavily in AI and automation, is positioning itself to capture value across farming’s digital transformation. The company is reaping returns not just from selling equipment, but from software, data services, and efficiency gains that generate recurring revenue streams.

FMC, conversely, faces margin compression and demand destruction. Its business model depends on high chemical consumption—exactly what Deere’s innovation is designed to eliminate.

For investors evaluating opportunities in industrial and agricultural sectors, the lesson is clear: companies that anticipate and lead technological change generate superior returns. Deere’s commitment to reaping the benefits of agricultural automation—and FMC’s inability to adapt—offers a compelling case study in why technological positioning matters far more than historical market share or brand recognition.