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Deere lowers production in soft farm economy

Demand for new farm equipment is softening. Analysts say producers are hanging onto aging machinery longer because of the sagging farm economy. It’s resulted in Deere cutting its production.

Deere says shipments might be as much as 20 percent less than a year ago because of wet weather, trade tensions and even African swine fever cutting soybean demand. Bloomberg quotes an analyst saying Deere is reducing production to lower field inventory. Deere is confident that long-term grain demand and the company’s focus on technology will bring orders back.

Deere’s net income dropped $70 million in the latest quarter, compared to the same period a year ago. Agri-Pulse cites the Association of Equipment Manufacturers saying tractor sales were 12 percent higher, but there was a more than four percent drop in combine sales compared to a year ago.