19 August 1998
Tractor demand dropping, warns JD
TRACTOR maker and farm machinery manufacturer John Deere & Company said the market was becoming “increasingly challenging” with retail demand likely to fall in next 18 months.
The US-based company said the fall was due to declining farm commodity prices, which have resulted from strong international production and the loss of Asian demand.
The situation could be offset by federal support in the US Midwest and southern states. But the company has scaled back production to take account of the slump in the market.
Deere reported third-quarter profits of $290.8m (£180m), against $252.7m last time. Sales were up 8% at $3.7bn.
The company said the agricultural division alone saw sales rise 3% to $1.97bn. Operating profit from agricultural business was 1% higher in the quarter, at $282m.
Deere said the agricultural business division had seen lower operating expenses but that these had been partly offset by higher sales incentives, bigger expenditures on “growth initiatives” and a less favourable sales mix.
Financial Times 19/08/98 page 27