Al Root
Sometimes, figuring out daily stock market reactions to news is hard. Take Deere.
Shares rose 5.4% on Thursday, trading as high as $503.88 and closing at $500.80, while the S&P 500 and the Dow Jones Industrial Average ended flat and up 0.6%, respectively.
There weren't any major corporate announcements, or Wall Street upgrades or downgrades to pin gains on. Instead, Health and Human Services Secretary Robert F. Kennedy Jr. announced an updated food pyramid on Wednesday.
He essentially inverted the old one, which emphasized grains and deemphasized proteins. Now, proteins are at the top of the pyramid, along with vegetables; grains are at the bottom.
Why this would impact Deere is a good question. More meat consumption requires more grain production. More grain production requires more acres of corn and soybeans planted by U.S. farmers. More acres planted means more tractors and tractor parts needed -- benefiting Deere.
More protein consumption requiring more grain might seem counterintuitive, but the animals need to eat, too. A cow might eat eight pounds of animal feed to make a pound of meat. A pig and a chicken might eat three and two pounds of feed, respectively, to make a pound of meet. In that way, more protein consumed by humans can lead to more grain production for farmers.
To be sure, the food pyramid adding $7 billion in market value to Deere feels like a stretch. But without a better explanation, that might just be what happened.
Through Thursday trading, Deere stock is up more than 20% over the past 12 months. Gains came despite falling earnings per share. Deere earned $18.50 per share in the year ended October 2025, down from more than $24 per share in the year ended October 2024.
Deere earnings are cyclical and lag farm income, which peaked at roughly $200 billion in 2022 and fell to below $140 billion by 2024. Net farm income in 2025 is expected to be about $180 billion, a sign that Deere sales should pick up eventually.
Deere sales recently peaked at about $56 billion in fiscal year 2023, a year after farm income peaked. Sales in the recently-completed fiscal year 2024 tallied about $39 billion, down for the second consecutive year.
Barron's wrote positively about Deere in July, when the stock was at about $500. We argued the worst for the farm sector was likely over and that Deere's investments in technology would start to enhance profits. With Thursday's performance, the stock finally got back to that level.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 08, 2026 17:00 ET (22:00 GMT)
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