Lower grain prices are likely to lead to more falling equipment sales. Deere & Company suggested the lower prices will discourage farmers from buying equipment as farmers will have less cash to spend. AGProssional reports Deere’s sales have already taken a hit on lower corn prices which have fallen about 11 percent this year so far, on top of a decline of nearly 40 percent last year. Add onto that the limbo status of certain tax credits and Deere expects sales for 2015 to decline 21 percent in the first quarter ending January 31st.
Sale of farm machinery in North America is expected to fall 25-30 percent industry-wide next year. Deere gets more than two-thirds of its revenue from farm and turf machinery. The company has cut jobs and scaled back production of farm equipment to match demand. Deere said in August that it would lay off more than 1,000 employees at five U.S. plants.