What impacted Deere's sales cost reduction in 2025?

Deere's sales cost reduction in 2025 was impacted by a combination of factors:

1. **Sluggish Demand and Weakness in Key Segments**: Deere experienced a significant decline in sales, with equipment sales dropping 35% in the first quarter of fiscal 2025. This was attributed to lower shipment volumes across all segments, sluggish demand, and a growing preference for used machinery over new equipment. The Agricultural and Turf equipment sales fell by 34%, and the Construction and Forestry segment saw a 38% year-over-year decline in sales volumes.
2. **Government Subsidies and Low Crop Prices**: The impact of government subsidies on farm incomes and the resulting effect on demand for new farming equipment, coupled with low crop prices, weighed heavily on Deere's sales. Despite the U.S. Department of Agriculture's forecast of a 29.5% increase in net farm income to $180.1 billion for 2025, the total crop receipts were expected to decrease due to lower soybeans and corn prices, which could persist in weighing on the demand for new farming equipment.

In summary, Deere's sales cost reduction in 2025 was primarily influenced by a combination of sluggish demand, particularly in the Agricultural and Turf equipment segments, and low crop prices, coupled with government subsidies impacting farm incomes and equipment demand.