US tractor manufacturer Deere & Company has today (Wednesday, November 22) announced that it is expecting demand for its agricultural machinery to fall in 2024.
In a financial statement, the Illinois-based company has forecast that demand for its agriculture and turf equipment will be down by between 5-15% in the US, while a 10% dip in sales is predicted for Europe.
It is also anticipating a 5-10% drop in demand for its construction and forestry equipment.
Deere
Despite the gloomy outlook, Deere has reported net income of almost $2.4 billion for the fourth quarter (Q4), up from $2.2 billion in the same period in 2022.
The company said that net income for the fiscal year 2023 was $10.1 billion, compared with $7.1 billion the previous year.
The financial statement shows that net sales were $13.8 billion for Q4 2023, down from $14.3 billion for the same period last year.
Net sales for the year stood at $55.5 billion, compared with $47.9 billion in 2022.
The company noted that production and precision agriculture sales decreased by 6% for the quarter due to lower shipment volumes, which were partially offset by price realisation.
Sales of small agriculture and turf equipment were down 13% in Q4, while construction and forestry sales were up 11%.
Machinery
“Deere’s fourth-quarter and full-year results can be attributed to the successful execution of our smart industrial operating model and the value that customers recognise in our industry-leading products and solutions,” John C. May, chairman and chief executive officer of Deere & Company, said.
The company has forecast a lower than expected net income for the 2024 fiscal year of between $7.75 billion to $8.25 billion.
“While our end markets will fluctuate, we remain focused on disciplined execution and strategically investing in solutions that drive customer value.
“As evidenced by our guidance for 2024, we are demonstrating higher levels of through-cycle structural profitability while making our company more resilient and better equipped for the future,” May said.