John Deere partners with the Reservoir to drive innovation in high-value crops

John Deere has entered into a strategic partnership with the Reservoir, a California-based agtech incubator focused on specialty high-value crops, in a move aimed at accelerating innovation in a segment of agriculture that has been slower to mechanize. The deal grants Deere exclusive status as the Reservoir’s original equipment manufacturer partner, providing access to early-stage startups, on-farm R&D programs and technology demonstrations. For Reservoir’s network of entrepreneurs, the collaboration opens Deere’s expertise, equipment and global grower relationships.

Executives said the partnership is designed to address some of the most pressing issues for specialty crop producers, including chronic labor shortages, rising cost pressures and increasing sustainability demands. “We view high-value crops as an important growth area for agriculture, and an area where innovation is needed and can have a direct, measurable impact on growers’ resilience and productivity,” said Sean Sundberg, business integration manager at Deere. Danny Bernstein, chief executive of the Reservoir, added that the collaboration “strengthens the foundation we’re building and helps unlock the next generation of ag technology in service of our food system.”

The move comes as Deere faces mounting pressure in its core business. In its most recent quarter, the company’s Production & Precision Agriculture segment — which includes large tractors and advanced machinery — saw revenue fall 16 percent year over year to $4.27 billion, prompting Deere to lower its full-year net income forecast to between $4.75 billion and $5.25 billion. Demand for large farm equipment has slowed as US growers grapple with lower crop prices and excess inventories of used machinery. By contrast, specialty crops represent a comparatively faster-growing segment where mechanization and digital tools are still gaining ground.

Analysts estimate that the global smart specialty crop farming market, valued at $2.28 billion in 2024, will expand at an annual rate of more than 11 percent to reach $3.86 billion by 2029. Deere’s entry into this space gives it a stake in a sector that promises stronger growth potential than the broader US agricultural equipment market, which is forecast to grow at under 5 percent annually over the same period. Labor and sustainability challenges in specialty crop farming are not confined to California; growers in Europe, Latin America and Asia face similar pressures, creating opportunities for scalable automation and precision solutions beyond the US.

The partnership also signals Deere’s intention to broaden its innovation footprint beyond traditional row crops. The company has pledged to invest more than $20 billion in U.S. manufacturing and technology over the next decade, and by anchoring itself in California’s Salinas Valley — one of the nation’s leading specialty crop regions — Deere positions itself to influence the next wave of agtech development. Walt Duflock, senior vice president of innovation at Western Growers, described the deal as “a vital strategic step toward making sure specialty crop growers have a fighting chance amid our industry’s labor shortage.”

For Deere, the collaboration provides a hedge against cyclical downturns in its main equipment lines, while giving it early exposure to startups developing practical solutions for some of agriculture’s most persistent challenges. For the Reservoir, the tie-up offers validation and scale. Together, the two organizations are betting that by uniting heavy-equipment engineering with startup-driven experimentation, they can help high-value crop producers “do more with less” — a formula Deere increasingly needs to make work across its business.