Addressing the question, “When do you see a rebound in store for the agricultural sector?” Samuel Allen, Deere & Co. chairman and CEO, said in the company’s 2015 Annual Report, “Nobody knows the answer, but we do know the current downturn is about too much supply, not too little demand.
“We’ve had bumper crops on a global scale for several years now, which has caused prices for grains and oilseeds to move lower. Demand, however, has continued to grow as it does almost every year. It’s important to understand that today’s crop surplus is not excessive and could be absorbed pretty fast in case of a widespread drought or other event that disrupts production. If that were to happen, you can bet it would have a positive, and likely rapid, impact on commodity prices and farm incomes.
“Another consideration is that Deere sales rarely drop more than 2 years in a row and, according to our records that go back about 80 years, have never done so for more than 3. While history isn’t always predictive, it suggests these things typically sort themselves out in a reasonably short period of time.”
— Ag Equipment Intelligence, January 2016