SecProbe.io

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								January 5, 2005

Mr. Nathan J. Jones
Senior Vice President and Chief Financial Officer
Deere & Company
One John Deere Place
Moline, IL  61265

Re:	Deere & Company
	Form 10-K for the year ended October 31, 2004
	File No.  1-4121

Dear Mr. Jones:

      We have reviewed the above referenced filing solely with
respect to the statement of cash flow presentation of cash
receipts
from the sale of inventory.  We believe that your presentation of
the
cash flow effects of certain financing receivables as investing
cash
flows on Deere & Company`s consolidated statements of cash flows
may
not be in compliance with the SFAS 95 requirement to present all
cash
receipts from sales of goods or services as operating cash flows.
We
outline below our understanding of your presentation and the
reason
why we believe your presentation may be in error.  We request
additional information related to trade accounts and notes
receivables and finance receivables and ask that you consider the
need for clarifying disclosure.  We also raise separately below
questions stemming from your disclosure of what appears to be
intercompany trade receivables transactions and/or allocations and
certain vague descriptions on the consolidated statement of cash
flows related to receivables cash flows.

Cash Receipts from Sale of Inventory

	We note that Deere & Company sells inventory to distributors,
dealers, and general and mass merchandisers. We also note on page
7
that Deere & Company, through the dealers it owns, may also sell
directly to retail customers.  We note in Notes 8 and 9 that Deere
&
Company has a number of receivables, including trade accounts and
notes receivable, retail notes, wholesale notes, revolving charge
accounts, financing leases, and operating loans.  We understand
that
some of these receivables are originated by Deere & Company`s
credit
subsidiaries, but it is unclear which of these receivables relates
to
the sale by Deere & Company of its inventory.  We do note on page
7,
however, that one component of financing receivables, wholesale
notes, represents financing of inventories sold by Deere & Company
to
dealers.  It appears that your accounting policy is to classify
all
changes in financing receivables in investing cash flows.  This
policy, when applied to financing receivables resulting from the
sale
of inventory appears in the period of sale to have the effect of
presenting in Deere & Company`s consolidated statements of cash
flows
an investing cash outflow and an operating cash inflow for the
amount
of the loan even though there was no cash inflow or outflow to
Deere
& Company on a consolidated basis.  In subsequent periods, this
policy appears to reflect cash receipts from the sale of inventory
as
investing activities in Deere & Company`s consolidated statements
of
cash flows.  If our understanding is correct, we believe such
classifications to be in error.

	Classification of the cash flow effects of receivables from
the
sale of inventory as investing activities in Deere & Company`s
consolidated statement of cash flow does not comply with the
requirements of SFAS 95.  Paragraph 22a of SFAS 95 states that
cash
receipts from the sales of goods or services are operating cash
flows.  Paragraph 22a clarifies that classification as an
operating
activity is required regardless of whether those cash flows stem
from
the collection of the receivable from the customer or the sale of
the
customer receivable to others; regardless of whether those
receivables are on account or stem from the issuance of a note;
and
regardless of whether they are collected in the short-term or the
long-term.  It is important to note that SFAS 102 did not change
this
requirement.  SFAS 102 addressed in part whether loans made by
financial and similar institutions were sufficiently similar to
product inventory of non-financial institutions such that the cash
flow effects of those loans should be classified in the statement
of
cash flows in the same way as the cash flow effects from the sale
of
inventory, as operating activities.  SFAS 102 did not alter the
requirement in paragraph 22a to classify cash receipts from the
sale
of inventory as operating activities.  As the SFAS 95 basis for
conclusions indicates in paragraphs 93 to 96, the FASB considered
and
rejected classifying any portion of the cash receipts from sale of
inventory as investing activities.

	If you present in Deere & Company`s consolidated statement of
cash flows inventory cash flows between the registrant and/or its
consolidated subsidiaries as an investing cash outflow and an
operating cash inflow in the period Deere & Company sells
inventory
and there is no cash inflow to Deere & Company on a consolidated
basis from the inventory sale, we believe such a presentation
represents an error in Deere & Company`s consolidated financial
statements.  Similarly, if you present cash receipts from
receivables
generated by the sale of inventory as investing activities in
Deere &
Company`s consolidated statements of cash flows, we believe such
classifications represent errors.  Such errors, if material, would
require restatement of Deere & Company`s historical financial
statements.

	Please tell us whether our understanding of your policy and
its
effects are correct.  If they are correct, please also tell us in
your response how you plan to address the matters raised above.
Please also address the following and consider the need for
clarifying disclosure:
a) Tell us which of the receivables identified in Notes 8 and 9
relate to the sale of inventory and where the related cash flows
are
classified in the consolidated statement of cash flows.
b) Tell us to what the financing lease receivable disclosed in
Note 9
relates and where the cash flows from these transactions are
classified in the consolidated statement of cash flows and why.

Intercompany Trade Receivables Transactions and/or Allocations

	Please tell us and clarify in your disclosure how, if at all,
the trade receivable transactions described in Note 8 between what
management refers to as "Equipment Operations" and "Financial
Services" impact the classification of cash flows related to those
trade receivables on the consolidated statement of cash flows.  In
your response, please reconcile the disclosure in Note 26 that
these
cash flows have been eliminated from the consolidated statement of
cash flows with the disclosure in Note 8 that such transactions
have
"substantially no effect on consolidated net income."  That is, if
they are not eliminated entirely from the consolidated statement
of
income and you present your cash flows from operating activities
using the indirect method, it is unclear how those intercompany
transactions and/or allocations are eliminated from the statement
of
cash flow.  If, as it appears, "Equipment Operations" and
Financial
Services" are discretionary distinctions by management used to
describe pieces of the consolidated results of operations, then it
appear that such transactions and/or allocations should have no
impact on the amounts presented in the consolidated financial
statements.

Consolidated Statement of Cash Flow Subtitles

	We note that Deere & Company classifies changes in
"Receivables"
within operating activities and "Collections of Receivables" and
"Cost of Receivables Acquired" within investing activities.  The
similar nature of these descriptors makes it difficult to discern
the
basis for the different classifications.  Please use more precise
descriptors which clearly convey the basis for the differing
classifications as well as how the amounts presented relate to the
footnote disclosure of trade accounts and notes receivables in
Note 8
and financing receivables in Note 9.

* * * * *
	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

	Please tell us within 10 business days whether our
understanding
and observations relayed above are correct.  If they are correct,
please also tell us in your response how you plan to address the
matters raised above.  If you have any questions regarding this
letter, please do not hesitate to contact Stephanie Hunsaker,
Assistant Chief Accountant, at 202.942.2982 or me at 202.942.2874.
Sincerely,

Todd E. Hardiman
Associate Chief Accountant

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Mr. Nathan J. Jones
Senior Vice President and Chief Financial Officer
Deere & Company
January 5, 2005
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