Farming equipment maker Deere expects South American farmers to buy 20% more tractors and harvesting combines after this year. Record harvests and increased profitability are giving South American farmers the confidence to buy. Meanwhile North American farmers aren’t feeling the same, with expectations that they will purchase 5% less farm equipment this year. The slump in U.S. and Canadian sales is a bit of a backlash from recent success. Bob Tita writes in the WSJ:
The slump, driven by years of strong harvests that have produced record global grain stockpiles, is pushing some U.S. farmers to the brink of bankruptcy. That has left them with less cash to buy everything from seeds to combines, weighing on major agriculture-focused firms. Deere’s farm equipment sales fell 36% to $18.5 billion in 2016 from a peak of $29.1 billion in 2013.
“We’re not seeing significant changes in the outlook for our farmer customers,” said Tony Huegel, Deere’s director of investor relations. “It’s hard to argue today for significant recovery in commodity prices.”
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