Deere beats Q3 forecasts, raises guidance, and invests in rugged AI for agriculture
Deere & Co. reported Q3 2026 net income of $1.379 billion, exceeding expectations despite a decline in its precision agriculture segment. The company raised its full-year guidance, signaling a potential bottom in the farm machinery cycle. It also announced a $10 million, three-year partnership with Reservoir to develop rugged AI technologies for high-value crops.
Deere's quarterly report revealed a mixed performance across its business lines. Small Agriculture and Turf sales rose 12% with profits up 28%, while Production and Precision Agriculture saw sales fall 6% and profits drop 9%, driven by lower shipment volumes partially offset by favorable pricing and currency effects. The company's revised full-year guidance of $4.75 billion to $5 billion suggests management believes the prolonged farm machinery downturn has bottomed out.
The $10 million Reservoir partnership, spanning three years, targets rugged AI systems for high-value crops. Reservoir's inaugural Ruggedize event in Salinas, California, gathered engineers and founders working on farm robotics. Deere's Jason Brantley emphasized field-based validation, noting the collaboration addresses immediate labor needs while exploring future innovations in data, connectivity, and emerging agtech solutions across California, Arizona, and other agricultural regions.
This partnership could accelerate automation adoption in specialty crop farming, potentially easing chronic labor shortages that have long plagued the sector. Smaller growers may gain access to advanced robotics through subsidized participation, while larger operations could see improved efficiency and reduced input costs. However, the technology's high upfront investment may widen gaps between well-capitalized farms and smaller operations, and rural employment patterns could shift as autonomous systems expand into more agricultural niches.