Why Deere Is Leading the Agricultural AI Revolution—And Why FMC Is Falling Behind

The agricultural industry stands at an inflection point. While farming’s share of the American workforce has plummeted from roughly 80% in the 1700s to less than 2% today, the output from modern agriculture has expanded exponentially. Technological advancement is the primary driver of this paradox, and one company—Deere & Company—is positioning itself at the forefront of the next wave: artificial intelligence and automation.

Meanwhile, companies built on the old guard of agricultural chemistry are facing an existential challenge. FMC Corporation, a major pesticide and fungicide manufacturer, is experiencing the consequences of this technological shift. Their diverging trajectories paint a compelling picture for investors evaluating which sector of agriculture will thrive as the industry transforms.

The Agricultural Technology Revolution: Deere’s AI-Powered Approach

Deere & Company, trading on the NYSE under the ticker DE and colloquially known as John Deere, has been a fixture in farming for 189 years. Since its founding in 1837, the company has evolved from manufacturing basic farm equipment to offering a comprehensive suite of solutions that includes software platforms, satellite imaging, and increasingly, autonomous and AI-driven machinery.

The company’s recent innovations demonstrate how artificial intelligence is being integrated into farm operations at a granular level. Consider Deere’s smart spraying system—a breakthrough that addresses one of agriculture’s most persistent inefficiencies: pesticide application.

Precision Targeting: How Smart Sprayers Are Changing Weed Control

Traditional weed management required farmers to blanket entire fields with chemicals, an approach that was both costly and environmentally problematic. Deere’s intelligent spray technology operates fundamentally differently. Equipped with 36 cameras and machine learning algorithms, the system can identify individual weeds within a field and apply chemicals only where needed.

The results from a 1-million-acre testing program in 2023 underscore the technology’s impact:

• Water and chemical use declined by 50%
• Airborne chemical drift dropped by 87%
• Chemical runoff decreased by 93%

These metrics translate to tangible benefits for farmers: reduced input costs, lower environmental impact, and compliance with increasingly stringent agricultural regulations. For Deere, they represent a competitive moat built on technological sophistication.

Autonomous Tractors: The Future Is Already in Testing

Beyond precision spraying, Deere is advancing autonomous tractor technology currently undergoing field trials. These vehicles utilize 360-degree camera systems and advanced software to navigate fields, recognize obstacles, and avoid hazards while remaining under remote monitoring. A farmer’s involvement shifts from active operation to remote oversight—a fundamental change in how agricultural work is performed.

This development exemplifies the broader shift in farming: technology is multiplying individual farmer productivity while freeing up labor for other critical farm operations. The implication extends beyond efficiency; it addresses agriculture’s structural labor shortage.

Deere’s Financial Performance: Momentum Building Despite 2025 Challenges

Deere encountered headwinds during 2025, with net sales declining 12% and net income falling 29%. However, these results obscure a more nuanced picture. The company’s net income margin remains solid at 11%, and a significant portion of the decline stems from increased research and development expenditures, which climbed to $2.29 billion—representing 5.1% of sales over the past four years.

This R&D commitment positions Deere for future growth. More compelling is Q4 2025’s performance: net sales and revenue increased 11% compared to the prior-year quarter, signaling a potential inflection toward recovery and renewed momentum heading into 2026.

Deere’s dividend policy further demonstrates financial confidence. The company has raised its dividend annually, with cumulative increases of 113% since 2020—a clear signal that management expects durable cash generation despite near-term cyclicality.

The Strategic Imperative: Feeding 10 Billion People

The company’s continued investment in agricultural innovation reflects a sobering reality: the global population is projected to reach 10 billion by 2050. Deere’s internal projections indicate that agricultural production will need to increase by 60-70% to sustainably feed this expanded population.

Automation and AI aren’t luxury innovations for Deere—they’re existential requirements. Fewer farmers are working more productive land, and that productivity gap will only widen as global population grows and arable land remains constrained.

The Casualty: FMC’s Collapsing Business Model

While Deere advances its technological agenda, FMC Corporation (NYSE: FMC)—a leading manufacturer of pesticides, fungicides, and agricultural chemicals—faces an unraveling business model. The company’s recent financial results reveal the magnitude of this challenge.

In Q3 2025, FMC reported:

• Revenue collapsed 49%, declining from $1.04 billion to $542 million
• Net income swung from $66 million profit to a $569 million loss
• Earnings per share deteriorated from $0.52 to a loss of $4.52

The deterioration extends to cash flow projections. FMC ended 2024 with $614 million in free cash flow, yet projects a $100 million free cash flow deficit for 2025—a dramatic reversal in financial health.

Why Deere’s Innovation Threatens FMC’s Future

The connection between Deere’s technological advancement and FMC’s decline isn’t coincidental—it’s causal. As Deere’s smart sprayers reduce chemical usage by 50% while maintaining crop protection, demand for the very products that constitute FMC’s revenue base erodes.

Deere’s autonomous and AI-powered farming solutions represent a structural headwind for chemical manufacturers. If precision agriculture reduces pesticide demand by half industry-wide, traditional chemical suppliers face a decaying addressable market—one with few levers to offset declining volumes through price increases, given the commoditized nature of agricultural chemicals.

The Investment Perspective: Deere Versus FMC

For investors, the choice between these two companies reflects a broader thesis about agricultural evolution. Deere is capturing the value created by technological productivity gains, while FMC is defending against the erosion of legacy product demand.

Deere’s combination of durable market position, technological leadership, improving quarterly momentum, and consistent dividend growth presents a compelling narrative for long-term investors seeking exposure to agricultural innovation.

FMC, by contrast, faces an uncertain path to profitability amid structurally declining demand for its core products. The company’s financial deterioration, accelerating cash burn, and lack of clear strategic positioning in a precision-agriculture world suggest limited near-term recovery prospects.

The agricultural industry’s transformation is underway. Deere is positioned to benefit from it; FMC is positioned to struggle beneath it.