(Reuters) – Deere trimmed its annual revenue forecast for the second time on Thursday, as farmers purchase fewer tractors and mix harvesters because of falling crop costs.
The world’s largest farm tools maker stated it now expects fiscal 2024 internet earnings of about $7 billion, in contrast with its prior forecast of $7.50 billion to $7.75 billion.
The U.S. Division of Agriculture has forecast internet farm earnings to slip 25.5% to $116.1 billion this 12 months from 2023, as corn and soy costs plummeted to greater than three-year lows.
Larger rates of interest have added to the squeeze for farmers, leaving tools sellers with bloated inventories and forcing firms like Deere and CNH Industrial to chop manufacturing.
U.S. inventories of tractors of 300 horsepower and above jumped greater than 95% year-on-year in March, in response to information from Sandhills World, which tracks used tools stock for equipment makers.
Deere now expects gross sales of huge agriculture tools to say no between 20% and 25% this 12 months, in contrast with its earlier expectations for a roughly 20% fall.
Shares of the corporate have been down almost 4% in premarket buying and selling.
(Reporting by Deborah Sophia in Bengaluru; Modifying by Sriraj Kalluvila)