John Deere Is the 5th Largest Agricultural Bank in the Country
A full third of Deere’s business is now in lending.
A great new feature from the Wall Street Journal goes deeper into the sphere of influence of the famous Illinois-based green-and-yellow corporation, explaining that as of this year, Deere is also the fifth-biggest agricultural lender in the country, the only non-bank entity in a list of stalwarts like the Bank of America and Wells Fargo. Deere began its loan program during a downturn in the tractor business, emphasizing a system of leasing its equipment rather than selling; combine harvesters can cost around half a million dollars each, so leasing is often a more realistic option.
Seeing success in the equipment-leasing business, Deere began issuing loans for non-Deere-related things: seed, pesticide, fertilizer. Today, with loans of $2.2 billion, the leading division of John Deere accounts for a full third of the company’s total income. And with profit margins four times higher than they are for sales of equipment, Deere shows no signs of slowing.
But with farm income dropping steadily, Deere’s loans and leases practice can contribute to a vicious cycle. Financing enables farmers to buy into ever-more expensive seed-and-chemical systems from companies like Monsanto, while decreasing crop prices simply shunt farmers further and further into debt. The leasing system does allow for farmers to keep fewer pricey assets on the books – a farmer doesn’t own a leased tractor or combine – but that system, along with a baffling legal inability to repair their own equipment, means that farmers can’t save money by selling or using older machines.
Theoretically, the Journal notes, if grain prices explode due to bad weather, farmers could make back their money, pay off debts to companies like Deere, and the whole system could work out. But tell that to the farmers in the West coping with a massive drought right now: sure, wheat prices may be up, but it’s because crops have been destroyed. The cycle of debt continues…
Follow us
Republish!
Republish our articles for free, online or in print, under a Creative Commons license.
Republish this article
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Want to republish a Modern Farmer story?
We are happy for Modern Farmer stories to be shared, and encourage you to republish our articles for your audience. When doing so, we ask that you follow these guidelines:
Please credit us and our writers
For the author byline, please use “Author Name, Modern Farmer.” At the top of our stories, if on the web, please include this text and link: “This story was originally published by Modern Farmer.”
Please make sure to include a link back to either our home page or the article URL.
At the bottom of the story, please include the following text:
“Modern Farmer is a nonprofit initiative dedicated to raising awareness and catalyzing action at the intersection of food, agriculture, and society. Read more at <link>Modern Farmer</link>.”
Use our widget
We’d like to be able to track our stories, so we ask that if you republish our content, you do so using our widget (located on the left hand side of the article). The HTML code has a built-in tracker that tells us the data and domain where the story was published, as well as view counts.
Check the image requirements
It’s your responsibility to confirm you're licensed to republish images in our articles. Some images, such as those from commercial providers, don't allow their images to be republished without permission or payment. Copyright terms are generally listed in the image caption and attribution. You are welcome to omit our images or substitute with your own. Charts and interactive graphics follow the same rules.
Don’t change too much. Or, ask us first.
Articles must be republished in their entirety. It’s okay to change references to time (“today” to “yesterday”) or location (“Iowa City, IA” to “here”). But please keep everything else the same.
If you feel strongly that a more material edit needs to be made, get in touch with us at [email protected]. We’re happy to discuss it with the original author, but we must have prior approval for changes before publication.
Special cases
-
Extracts. You may run the first few lines or paragraphs of the article and then say: “Read the full article at Modern Farmer” with a link back to the original article.
-
Quotes. You may quote authors provided you include a link back to the article URL.
-
Translations. These require writer approval. To inquire about translation of a Modern Farmer article, contact us at [email protected]
-
Signed consent / copyright release forms. These are not required, provided you are following these guidelines.
-
Print. Articles can be republished in print under these same rules, with the exception that you do not need to include the links.
Tag us
When sharing the story on social media, please tag us using the following: - Twitter (@ModFarm) - Facebook (@ModernFarmerMedia) - Instagram (@modfarm)
Use our content respectfully
Modern Farmer is a nonprofit and as such we share our content for free and in good faith in order to reach new audiences. Respectfully,
-
No selling ads against our stories. It’s okay to put our stories on pages with ads.
-
Don’t republish our material wholesale, or automatically; you need to select stories to be republished individually.
-
You have no rights to sell, license, syndicate, or otherwise represent yourself as the authorized owner of our material to any third parties. This means that you cannot actively publish or submit our work for syndication to third party platforms or apps like Apple News or Google News. We understand that publishers cannot fully control when certain third parties automatically summarize or crawl content from publishers’ own sites.
Keep in touch
We want to hear from you if you love Modern Farmer content, have a collaboration idea, or anything else to share. As a nonprofit outlet, we work in service of our community and are always open to comments, feedback, and ideas. Contact us at [email protected].John Deere Is the 5th Largest Agricultural Bank in the Country
by Dan Nosowitz, Modern Farmer
July 24, 2017
Modern Farmer Weekly
Solutions Hub
Innovations, ideas and inspiration. Actionable solutions for a resilient food system.
ExploreExplore other topics
Share With Us
We want to hear from Modern Farmer readers who have thoughtful commentary, actionable solutions, or helpful ideas to share.
Submit
Refinance 30 yrs @ low interest