Deere (DE), Ridley (RIDYF): Crop Growers Defer Machinery, Ranchers Buy

Between 30 July and 20 August 2026, Deere & Company (DE), AGCO Corporation (AGCO) and CNH Industrial (CNH) each told an earnings call that higher fertiliser and diesel costs have pushed crop growers to apply less fertiliser and defer large-ticket machinery purchases [1][2][3]. Over the same weeks Deere and Ridley Corporation (RIDYF) disclosed the opposite movement on the other side of the farm gate: dairy and livestock customers still have cash, and spending on equipment and feed capacity is rising [1][4]. Farm spending has split by customer type rather than moving as one cycle.

How one cost increase splits farm spending in opposite directions

Agriculture has usually been read as a single cycle. Good crop prices meant growers bought tractors and applied more fertiliser; bad crop prices meant both fell together. But two different customers live on the farm. The arable grower who plants corn, soybeans and wheat sells grain, and fertiliser and diesel are his costs. The cattle and dairy producer sells animals and milk, and grain is something he buys as feed.

In 2026 fertiliser and diesel both rose by double digits [2]. That lands entirely on the arable grower's cost line, while commodity prices sit at or below breakeven for many growers [3], so the only available response is to cut what can be postponed: skip a fertiliser pass, push the machinery replacement out a year. The grain not bought at those prices still gets grown and stays in the country, which leaves feed supply comfortable for the buyer [4]. At the same time US cattle supply is tight. Tyson Foods (TSN) reported beef segment volume down 15.9% with pricing up 12.1% [5], and what the packer pays extra is the rancher's revenue. What remains of the arable grower's budget goes toward equipment that reduces the input bill itself.

What Deere and Ridley disclosed

Deere said on 20 August that its dairy and livestock customers had exceptionally strong cash flows in 2025 and have held healthy margins in 2026 on strong beef prices, and are therefore still investing selectively in efficiency equipment [1]. On the same call a year earlier the livestock fundamentals were equally healthy, but capital investment in that segment was held back by the high cost of expansion and industry demand was projected down 10% [6].

Ridley puts both directions inside one set of accounts. Its feed segment grew monogastric volumes 7% and ruminant volumes 4%, and it is building new feed capacity at Terang in Victoria against customer offtake commitments. Its fertiliser segment shows the reverse: prices up, volumes down, which management attributes to high prices cutting farmer demand [4].

Deere adds a third set of numbers. Seed, fertiliser and crop protection account for roughly 70% of a grower's operating costs. Its See & Spray targeted spraying - the sprayer aims at weeds instead of covering the whole field - delivers more than 50% herbicide savings in commercial use, and about one third of North American sprayers on order carry the option. In the same year large ag industry demand is guided down 15% to 20%, sprayer and planter early-order intake is running up mid-single digits against last year [1].

How suppliers get re-sorted by customer type and by product

The first line sets revenue direction. Large machinery, fertiliser distribution and row-crop chemistry sold to arable growers track a compressed farming margin, while equipment, feed and animal nutrition sold to dairy and cattle producers track cattle prices.

The second line sets long-run volume. If factory attachment of targeted spraying keeps expanding at the rates Deere reports, herbicide and starter fertiliser volume on those acres stops scaling with planted area, which is a volume problem for input makers rather than a price problem. Only Deere is making that argument. Corteva (CTVA) attributed its second-half crop protection price cuts to a well-supplied Brazilian market and generics, and did not mention targeted spraying at any point [7].

The boundary is equally clear: cheap feed and high cattle prices are not global conditions. USDA data cited on a July call put 2026 US corn planted area at 95.3 million acres, down 4% year on year, with carryout below 2025 and grain prices rising [8], and Australian cattle prices fell 4.2% in July to 438c/kg [9]. Three things can be tracked from here: Deere's two agriculture segments against each other, Ridley's feed EBITDA against its fertiliser EBITDA, and row-crop herbicide volumes.

Companies exposed to the same change

• Valmont Industries (VMI): It makes centre-pivot irrigation systems, exactly the kind of large arable capital item being deferred; its second-quarter 2026 agriculture segment revenue fell 15.8% year on year, which management attributed to tight farm economics constraining North American grower capital spending [10].
• Balchem (BCPC): Its animal nutrition and health segment is the US counterpart to Ridley's feed business, with the ruminant sub-segment up 20% year on year in the second quarter of 2026 almost entirely on volume [11], sitting at the point where producer cash flow converts into consumable spending.
• ImmuCell (ICCC): Almost all of its revenue comes from what dairy and beef producers spend on newborn calves [12], which makes it a small, clean test of whether livestock cash is actually being spent rather than banked.

Sources

[1] Drillr · Deere & Company (DE) · 2026-08-20 · FY2026 Q3 earnings call

Our dairy and livestock customers experienced exceptionally strong farm cash flows in 2025 and have been able to maintain healthy margins in 2026, supported by strong beef prices. As a result, they continue to invest selectively in productivity-enhancing equipment and solutions that improve operating efficiency and support long-term profitability.

[2] Drillr · AGCO Corporation (AGCO) · 2026-07-30 · Q2 2026 earnings call

[3] Drillr · CNH Industrial (CNH) · 2026-08-03 · Q2 2026 earnings call

[4] Drillr · Ridley Corporation (RIDYF) · 2026-08-19 · FY2026 full-year earnings call

[5] Drillr · Tyson Foods (TSN) · 2026-08-03 · FQ3 2026 earnings call

[6] Drillr · Deere & Company (DE) · 2025-08-14 · FY2025 Q3 earnings call

[7] Drillr · Corteva (CTVA) · 2026-07-31 · Q2 2026 earnings call

[8] Drillr · CVR Partners · 2026-07-30 · Q2 2026 earnings call (citing USDA planted-acreage and carryout data)

[9] Farm Weekly · global cattle market monthly review · 2026-08-04 · news report · https://www.farmweekly.com.au/story/9323023/global-cattle-market-prices-ease-slightly-us-influence-remains-key/

[10] Drillr · Valmont Industries (VMI) · 2026-07-21 · Q2 2026 earnings call

[11] Drillr · Balchem (BCPC) · 2026-07-31 · Q2 2026 earnings call

[12] Drillr · ImmuCell (ICCC) · 2026-08-14 · Q2 2026 earnings call

This is only meant to surface industry changes and companies that may be overlooked - not a stock recommendation.