Deere Says Trade Tensions Holding Down Sales
Deere & Co. said farmers are delaying purchases of machinery as they wait for a resolution of trade standoffs between the U.S. and major foreign buyers of farm commodities such as China. The company said Friday that initial orders of tractors, combine harvesters and other equipment were weak, contributing to the lower-than-expected quarterly profits.
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Early orders are typically a strong driver of annual sales for the Moline, Ill.-based company. Farmers often place orders for multiple pieces of equipment in the late fall and winter in exchange for price discounts. The company said initial buying across its major equipment categories was flat or down moderately from last year.
Trade disputes with major buyers of U.S. farm commodities such as China and Mexico have further rocked agricultural markets already struggling from a multiyear slump in prices for corn, soybeans and other commodities, caused by a world-wide glut.
Deere said farmers are closely watching a March 1 deadline for a potential trade settlement between the U.S. and China. The U.S. has threatened to impose more tariffs on March 2 if a deal isn’t reached. Exports of U.S.-grown soybeans to China collapsed last year. China imposed a tariff in retaliation for U.S. duties on hundreds of manufactured goods from China.
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https://www.wsj.com/articles/deere-swings-to-profit-but-higher-costs-weigh-on-business-11550234521 (paid subscription)
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