19 May 1999
Farming slump hits Deere

DEERE & Co saw its profits more than halved in the second quarter as the worldwide farming slump took its toll.

The US agricultural equipment maker said it made $150.1 million (£93m) in the three months to the end of April, compared with $365.2m in the same period a year ago.

It has warned that further production cuts would be necessary to reduce inventory.

Deere expects North American retail demand to slump by up to 30% and reductions of between 5% to 15% to take place in other markets.

US farmers were reluctant to invest in new hardware because of poor commodity prices in the USA, the company said.

Problems in obtaining credit presented difficulties in emerging markets.

Deeres sales for the quarter fell by 30%, to $1.54bn, and are down 27% in the first six months of its financial year, at $2.66bn.

Operating profit from farm equipment was just $58m, compared with $364m a year ago.