21 August 1998
Farm machinery demand falls through the floor
US makers and sellers of agricultural equipment are experiencing a softening of demand, reports the Financial Times.
A boom in output for most of the main crops in North America, South America and Europe, coupled with a sharp reduction in Asian import demand over the past year, have sent farm commodity prices down. As agricultural incomes shrink, so has demand for agricultural equipment.
The worlds largest manufacturer, Illinois-based John Deere & Co, , has just cut production schedules and suffered attacks on its share price. The same fate has hit Wisconsin-based Case Corporation and Georgia-based Agco.
Agco reports declines of 39% in the UK market and 5% in France during the first half of 1998.
The Clinton Administration has eased US farmers liquidity problems by accelerating the payment of $5.5 billion (£3.37bn) worth of special allowances, but this has failed to stimulate demand for equipment.
Manufacturers remain sanguine about the longer term prospects, although industry analysts are taking a pessimistic line.
Financial Times 21/08/98 page 23