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Aug. 22, 2016 Des Moines Register reports: Deere & Co. warned Friday that tractor production at its Waterloo plant will be cut through at least October as the world's largest maker of farm equipment waits for used inventory levels to decrease at many of its dealerships. The maker of iconic green tractors and combines said work hours at the Waterloo facility will be down by 20 percent during its fourth quarter, compared with a year ago. Cuts will be even deeper at its Harvester Works plant in East Moline, Ill., where the combine facility expects production hours to be down about 60 percent. "Low commodity prices, weakening farm income and elevated used equipment levels in the U.S. and Canada are continuing to pressure demand for farm equipment, especially high horsepower models," said Josh Jepsen, Deere's manager of investor communications. Overall, agricultural equipment sales are expected to be down 15 to 20 percent this year in the United States and Canada, the company said. The depressed agricultural economy has squeezed producer income, forcing farmers to buy less seed and fertilizer, and delay purchases of large equipment. Monsanto, DuPont, the parent of Johnston-based seed company Pioneer, and other agribusiness companies have reported declining revenue and cut jobs. Deere has laid off about 2,000 workers since the start of the agriculture downturn, including in Ankeny and Waterloo, manufacturing homes for big tractors, sprayers and cotton pickers. During the company's third quarter ended July 31, Deere reported sales in its agricultural and turf division declined 11 percent to $4.70 billion due to lower shipment volumes and an unfavorable currency exchange. Profit for the division rose to $571 million, up $99 million from a year earlier, as Deere benefited from better pricing for its products, lower production costs and a decline in selling, administrative and general expenses. The Agriculture Department last week forecast U.S. farmers will harvest their largest corn and soybean crops in history this fall. The record harvest, on top of already plentiful supplies, has pressured commodity prices and farmer profits. Farmers are expected to have income of $54.8 billion in 2016, the lowest since 2002 and a decline of 56 percent from the high of $123.3 billion three years ago. Tweet |
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