Farm slump hits John Deere

17 February 1999

Farm slump hits John Deere

THE slump in farm incomes has hit first quarter profits at John Deere which fell to just $49.7 million (£30m) from $203.3m for the same period a year earlier.

The US company said operating profit on the agricultural side was barely one-tenth of the level a year ago.

Demand for large tractors and combines was “severely affected”, and production cuts meant manufacturing assets were used less efficiently.

Total agricultural equipment operating profit was just $25m, compared with $206m a year ago.

Overall sales for the quarter were down by 14% at $2.46bn.

The company is making a pessimistic forecast for this year. It expects net cash income among US farmers to fall about 9% this year, which it believes will mean that retail demand for farm equipment will decline by 25%.

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