(Reuters) – Deere & Co forecast 2025 profit below Street expectations on Thursday, as plummeting farm incomes and inflationary pressures dent demand for the company’s tractors and other farm equipment.
U.S. farm income is expected to fall for a second consecutive year in 2024, as farmers grapple with corn and soybean prices hovering near four-year lows.
The U.S. Department of Agriculture estimates this year’s net farm income, a broad measure of profitability in the agricultural economy, will hit $140 billion, down 4.4% or $6.5 billion from a year earlier.
The world’s largest farm-equipment maker expects profit for fiscal year 2025 in the range of $5 billion to $5.5 billion, compared with analysts’ average estimate of $5.93 billion, according to data compiled by LSEG.
A decline in farm incomes, high interest rates and an uncertain economy have compelled farmers to reassess large expenses on agricultural machinery and forced dealers to limit inventory restocking.
The company reported a net income of $1.25 billion, or $4.55 per share, compared with $2.37 billion, or $8.26 per share, a year earlier.
Fourth-quarter worldwide net sales and revenue fell 28% to $11.14 billion.
(Reporting by Shivansh Tiwary and Utkarsh Shetti in Bengaluru; Editing by Pooja Desai)