Economics
Ag Economy Is So Bad That Farmers Hang on to Old Deere Tractors
- Deere is cutting production to deal with demand decline
- Order books trail prior year with shipments expected to drop
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Demand for new farm equipment should be in full swing. American growers have outdated fleets of tractors, and they need to be replaced. Yet there’s a reluctance to buy, and Deere & Co. has even started cutting production to deal with it.
The machinery giant’s order books show demand that’s trailing last year, executives told analysts on an earnings call. In the second half, it sees some of its larger facilities shipping as much as 20% less than a year ago. Just last year demand was so strong that the company was ramping up production so fast it experienced bottlenecks in its supply chain.