Deere shares are up 3.7% this morning after the farming equipment giant reported better-than-expected earnings and revenues in line with expectations for their fiscal Q4.
As usual, they’ve published a presentation that provides a snapshot of the global agricultural sector.
With a couple of exceptions, it’s looking pretty weak — Deere projects global sales will decline by 6% next year as commodity prices decline, which will in turn hit farm income and dampen demand for equipment.
Remember, however, that farming looks at the economy a bit differently than consumers. If prices are falling because there’s too much supply, as Deere is projecting in several parts of the world, that means lower prices for end users.
Anyway, we’ve pulled the most important slides.
With the exception of Asian agricultural and American utilities sectors, the global sales outlook looks relatively weak.
The stocks-to-use ratio -- supply versus demand -- will tick upward for corn and soybeans on production increases, while wheat's ratio will decline. Cotton stocks continue to dwarf demand.
The worst is over for Europe, but with the exception of livestock, income growth will remain weak as prices stay low.
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