By Bob Tita

Deere & Co. said it incurred about $100 million in tariff expenses during the quarter ended April 27-and executives said they expect the cost will reach just over $500 million this year.

The equipment manufacturer said about 40% of the tariff expenses are in its construction and forestry equipment line. Deere's Wirtgen road paving equipment line is mainly produced in Germany, and for construction excavators built in North Carolina, the Illinois-based company imports components from Japan.

Around one-third of Deere's tariff costs derive from its small tractor and landscaping equipment business, where U.S. demand has been falling. The company said it now expects sales from the business to decline by 10% to 15% this year from just a 10% reduction forecast in February .

Deere widened the range of its profit forecast this year to account for higher tariff expenses, and lower equipment sales. Soft demand for equipment is limiting the company's ability to raise prices, executives said.

Sales of Deere's farm equipment continue to show weak demand from farmers facing lower crop prices and higher production costs.

Deere now expects net income of $4.75 billion to $5.5 billion in 2025, compared with a forecasted range of $5 billion to $5.5 billion previously. Shares gained 3.6% in midday trading.

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May 15, 2025 13:06 ET (17:06 GMT)

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