Deere & Co. is expecting slower sales of its farm and turf equipment in 2010, but sees farm cash receipts and commodity prices improving throughout the year.
Deere’s ag and turf equipment sales declined 26% in the fourth quarter of 2009 and 14% for the full year ended October 31 largely due to lower shipment volumes. The division had an operating loss of $24 million for the quarter and operating profit of $1.448 billion for the full year, compared with last year’s operating profit of $460 million and $2.461 billion for the respective periods.
The company is projecting its total equipment sales will be down about 1% for fiscal 2010 and down about 10% for the first quarter of the fiscal year compared with the same period a year ago. The company’s net income is anticipated to be approximately $900 million for 2010.
Worldwide sales of the agriculture and turf division are forecast to decrease by about 4% for full-year 2010. On an industry basis, farm machinery sales in the U.S. and Canada are forecast to be down about 10% for the year.
U.S. farm cash receipts and commodity prices, while below their prior peaks, are anticipated to remain at healthy levels. However, farmers are expected to be cautious in their purchasing decisions as a result of sluggish overall economic conditions and near-term profitability issues in the livestock and dairy sectors.