Deere Cuts 2024 Profit View As Farm Equipment Demand Sags

Deere & Co. cut its 2024 profit forecast on Thursday as farmers remained hesitant about big-ticket equipment purchases due to high borrowing rates and falling crop prices, even as its first-quarter sales and profits topped Wall Street estimates, Bianca Flowers and Shivansh Tiwary reported for Reuters.

Shares of the world's largest farm equipment maker were down 3.3% in premarket trading. I Photo: John Deere Facebook

Shares of the world's largest farm equipment maker were down 3.3% in premarket trading.

With farmers reassessing expenses, particularly for compact tractors, Deere said it now expects net income for fiscal 2024 in the range of $7.50 billion to $7.75 billion. This is below its prior forecast of $7.75 billion to $8.25 billion.

Net farm income in the US is set to fall 27% this year to $116 billion, from its inflation-adjusted total in 2023, according to data from the US Department of Agriculture.

Deere, a barometer of the global economy, has maintained resilient operating profit margins despite depressed crop prices.

Demand for new equipment and parts to repair aging machinery bolstered sales in previous quarters, but executives have expressed caution about margin performance amid a weakening farm economy, and said it intends to cut equipment production in 2024.

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