The way farmers buy and pay for equipment is changing fast. While traditional tractor purchases and rental models continue to dominate, manufacturers are introducing subscription-based features that separate hardware from software capabilities. It’s a major shift in how manufacturers do business, and it raises big questions about long-term costs for farmers.
John Deere’s Digital Feature Activation Strategy
John Deere has announced plans to build digital capabilities into tractors as standard equipment, with farmers activating features through subscriptions rather than one-time purchases. The company’s CFO Ryan Campbell stated that Deere has historically monetized products at point of sale, but the nature of their solutions is changing to combine equipment with machine learning and software components.
For model year 2024, Deere began offering an Autonomy Prep package for 8 and 9 series tractors, which includes transmission, visibility package, implement ethernet, and a 330-amp alternator. The autonomy system is available as a Precision Upgrades kit for model year 2022 and newer 9R and 9RX tractors and model year 2020.5 and newer 8R and 8RX tractors.
In 2025, Deere rolled out its Operations Center Pro Service, a subscription-based platform that allows farmers and independent repair professionals to access diagnostics, clear trouble codes, perform calibration, and run service functions previously available only to dealers.
John Deere has committed to reaching 10% of annual revenue in software subscriptions by the year 2030. Deputy financial officer Joshua Jepson stated that the company expects about 10 percent of revenue to be recurring by 2030, which will increase the consistency of through-cycle earnings.
Other major manufacturers have not announced comparable tractor subscription programs. Case IH, New Holland, and AGCO focus on traditional purchase models with financing options, though 67% of dealers surveyed reported that their suppliers require subscriptions for connected customers.
Revenue Stability and Profit Margin Benefits
The subscription model offers equipment makers several advantages. Activating a digital feature on a machine can be done remotely, so after the initial machine sale there is little additional cost involved for the brands, which helps boost profit margins.
Deere expects that nearly 40 percent of revenue will be recurring or less cyclical, and the percent of earnings tied to these recurring revenues will be even higher. This creates a continuous revenue stream independent of new equipment sales cycles.
The goal is that all large tractors that ship come with autonomy kits on board, according to Willy Pell, vice-president of autonomy and new ventures at Deere. This positions manufacturers to monetize features throughout a tractor’s operational life rather than only at purchase.
Growth of Farming as a Service and Dealer Data
The broader “Farming as a Service” (FaaS) market demonstrates growing acceptance of subscription models. The global FaaS market is projected to grow from $4.70 billion in 2024 to $11.78 billion by 2030. The subscription model acquired majority share in the market in 2024 and is the fastest growing segment, since it offers scalability and flexibility.
However, tractor-specific subscriptions remain limited. Over 49% of dealers surveyed reported an increase in total precision sales and service revenue in 2025, compared to only 27% who reported an increase the year before. Signal subscriptions remained steady at 10% of total precision sales in 2024 and 2025.
Most dealers surveyed said 96% have at least some connected customers signed up in 2026, with almost 56% reporting between 1-25% of customers are connected.
Rising Equipment Costs Meet Declining Farm Income
Tractor ownership already represents substantial costs. Since 1990, the average price of a 200-horsepower tractor has risen 287% and the price of a new 300-horsepower tractor has risen 275%, double the rate of inflation from 1990 to 2024.
Average net cash farm income nationally for corn and soybean producers is expected to be at its lowest level since 2010 when adjusted for inflation. Average net cash farm income for all U.S. corn farms is forecast to be down 35% from 2023 to 2024, while income from soybeans is expected to decline 36% year-over-year.
Adding subscription costs to existing equipment expenses occurs during a period of financial pressure. Corn prices are expected to be around $3.90 per bushel and soybeans $10 per bushel for marketing year 2025/26, meaning margins will remain tight.
The subscription model changes cost structures. Instead of paying for all features at purchase, farmers pay over time for capabilities they activate. This could reduce upfront costs but increase total lifetime expenses depending on subscription duration and pricing.
The Real Benefits of Subscription Models
- Lower Initial Investment. Subscription services offer farmers cost-effective access to advanced agricultural technologies and resources without substantial upfront investments.
- Access to Updates. Software-based features can receive improvements without hardware replacement. Capabilities can be added remotely as technology advances.
- Scalability. The subscription model allows farmers to modify their programs to accommodate changing crop varieties, seasonal demands, or specific farm requirements without the need for a substantial initial investment in infrastructure or equipment.
- Try Before Committing. Farmers can test features seasonally before deciding on long-term adoption. This reduces risk when evaluating new technologies.
- Potential Tax Treatment. Subscription payments may be treated as operating expenses rather than capital expenditures, potentially offering different tax implications.
The Hidden Risks of Subscription Farming
- Ongoing Costs. Subscription fees accumulate over a tractor’s 15-25 year lifespan. Total payments could exceed what a one-time feature purchase would cost.
- Loss of Ownership. Farmers pay continuously for capabilities built into equipment they own. If subscriptions lapse, features become inaccessible despite the hardware remaining functional.
- Vendor Lock-in. Subscription models tie farmers to specific manufacturers’ platforms and pricing structures. Switching costs increase when operational workflows depend on proprietary software.
- Right to Repair Issues. In January 2025, the Federal Trade Commission filed an antitrust lawsuit against Deere & Company, alleging the manufacturer restricts access to repair tools and software and steers farmers toward its authorized dealer network. The lawsuit alleges this increases repair costs and delays.
- Uncertain Future Pricing. Manufacturers can adjust subscription rates. Long-term cost predictability depends on pricing stability over decades.
- Connectivity Requirements. Subscription features often require internet connectivity and cloud platforms. Autonomous machines must be managed via John Deere Operations Centre, the company’s cloud-based platform. Rural areas with limited broadband access may face operational constraints.
- Dependency on Manufacturer Support. If manufacturers discontinue platforms or change terms, farmers may lose access to features they have paid for over extended periods.
Leasing and Used Equipment Trends
Traditional equipment acquisition remains the primary method. Leasing activity began increasing in the second half of 2024 as producers began exploring methods to reduce equipment costs. AgDirect saw the largest year-over-year growth in auction and private party financing in its 26-year history.
Short-term rental programs continue to operate through dealers and rental companies. These typically charge daily or monthly rates without long-term commitments.
Pricing Explained
Specific subscription pricing for John Deere’s feature activations has not been publicly disclosed. The company has not released rate cards showing monthly or annual costs for autonomy features, precision agriculture capabilities, or other software-enabled functions.
Just over 77% of dealers surveyed prefer to bill precision services by the hour, up 10 percentage points from 2024, but this refers to dealer services rather than manufacturer subscriptions.
Without transparent pricing, farmers cannot accurately calculate total cost of ownership or compare subscription models to traditional purchases.
What’s Next for the Equipment Market
Following a year of decreasing commodity prices and projected farm income, the agricultural equipment market is navigating financial constraints. While producers will continue reinvesting in their operations, overall spending on equipment may remain under pressure.
The subscription transition is gradual rather than immediate. Traditional purchase options coexist with subscription features, allowing farmers to select models aligned with their financial strategies and operational requirements.
The long-term viability of subscription models in agriculture depends on whether farmers perceive value sufficient to justify ongoing payments, and whether manufacturers price subscriptions competitively against traditional ownership structures. Current economic pressures on farm income may slow adoption as operators prioritize preserving working capital over adding recurring expenses.
