John Deere is bringing 140 employees back to its Waterloo, Iowa, operations as demand ticks up for its 8R and 9R tractors — a recall that lands even as the company forecasts the North American ag equipment market will contract another 15% to 20% in 2026.

Waterloo builds the drivetrains for 8R tractors, pours the castings for the new high-horsepower 9R series, machines engines and handles final tractor assembly. Deere & Company President Deanna Kovar, months into her role leading the Worldwide Agriculture & Turf Division, confirmed the recall in an interview with Farm Journal and framed it as a response to real orders, not optimism.

"We just announced 140 workers to come back to our Waterloo operations… We're always happy when we can bring workers back into our factory. And it's because we're starting to see a little tick up in demand for those tractors," Kovar says.

The recall follows more than 2,000 US layoffs since 2024, concentrated in Iowa and Illinois. In January, Deere returned 99 workers to its Davenport Works and Dubuque facilities. Kovar says the demand uptick is global, not purely North American, and will build iteratively rather than in one jump.

The broader numbers remain grim. Association of Equipment Manufacturers figures for 2025 show 4WD tractor sales fell nearly 42% and combine sales dropped 36%. USDA's first 2026 forecast points to another year of declining net farm income, several years removed from the 2022 record.

"Deere is 188 years old, so we know we're part of a cyclical business of ag equipment… Our expectations that we shared in our last quarterly earnings was that the North American equipment market would be down 15% to 20% again in 2026," Kovar says. "It's tough out there."

Build for retail, protect the trade differential

Kovar, who grew up on a Wisconsin dairy farm and has spent 26 years inside Deere, emphasizes the company's build-for-retail discipline: no tractor gets built unless a buyer wants it. Deere has refined that model for 20 years in large ag equipment, adjusting schedules month to month rather than annually. The goal is to keep dealer lots from flooding and used values from collapsing.

That discipline extends to pricing. Kovar rejects simple sticker cuts, arguing the number that matters to farmers is the trade differential between the machine they own and the one they are buying.

"If we were to lower the price of equipment, it would lower the trade-in value of their used equipment as well," she says. "We're always very mindful of the equity farmers have in their equipment fleet and the fact it's a huge part of their balance sheet."

187,000 parts cheaper, new tier coming

Where Deere is cutting costs directly: parts. The company has reduced prices on 187,000 part numbers over the past two years. Later this summer it will launch a new, lower-priced tier of replacement parts, giving customers a choice between traditional OEM parts built for longer life and a cheaper option. Which tier fits depends on machine usage, equipment age and how long the farmer plans to keep it.

On technology, Deere is lowering the entry price for ExactShot fertilizer systems, See & Spray sprayer systems and combine automation, then letting customers pay as the value arrives.

Retrofit kits carry the same logic. The Precision Ag Essentials kit, launched last year, puts a John Deere GPS receiver, display and modem on any machine — Deere or non-Deere.

"We're seeing people put these kits on 20-year-old tractors and then being able to do things like AutoTrac, AutoPath and turn automation, section control, the things that can save 10% of inputs," Kovar says.

Right to repair and DEF relief

EPA moved twice in early February 2026. First came guidance affirming farmers' right to repair: the Clean Air Act allows temporary overrides of emission systems during repairs, manufacturers cannot restrict access to tools or software, and repairs can happen in the field. A day later, EPA demanded detailed failure data from major diesel engine manufacturers as it weighs further rules on DEF-related shutdowns and derates. The right-to-repair guidance answered a formal request Deere filed with the agency in June 2025.

Kovar says Deere will make its Operations Center ProService self-repair tool capable of clearing derate issues on tractors and combines by early to mid-March.

EPA's voluntary guidance last summer already extended the window before a DEF problem forces a derate — a window that was originally two hours. Deere is now extending that time across all the equipment it produces "over the coming months and years."

President Trump told a December roundtable of farmers that removing emissions requirements would prevent breakdowns and cut equipment costs. Kovar cautions the switch is not instant.

"We've spent 15 years perfecting the system we have today… If it were called tomorrow, we couldn't start building tractors without it the next day," she says.

An E-98 tractor and a demand agenda

Deere is also testing a tractor running on E-98 ethanol, which debuts at Commodity Classic in two weeks. The fuel burns clean enough to eliminate DEF entirely — and it is a crop farmers grow themselves.

The engine is not the bottleneck. "Do we have the fuels available? Do we have the on-farm ability? Are the fuel companies ready to deliver it to the farm? At this point, there is a much bigger system challenge that will have to work," Kovar says.

She pairs the fuel bet with demand advocacy: recent trade deals, grain exports and a push to get E-15 "across the finish line," followed by renewable diesel.

Looking ahead three to five years, Kovar expects the biggest gains in data-driven, real-time decisions rather than breakthrough iron. See & Spray already decides weed versus plant and sprays only the weed, cutting herbicide use 50% to 60%.

Farmers should watch three dates: the ProService derate-repair rollout in March, the Commodity Classic ethanol tractor debut, and the lower-priced parts tier announcement later this summer.