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Deere said weaker agricultural commodity prices have put pressure on the sale of farm equipment, leading the manufacturer to scale back production.
Weaker farm incomes have put pressure on the sale of Deere’s equipment, a trend that led to fewer industrywide sales in the U.S. and Canada. As a result, the maker of agriculture and construction machinery reported a 15% drop in fiscal third-quarter profit and trimmed its equipment-sales projection for the full year. It now sees a decline of about 6%, worse than the prior prediction of a 4% drop.
“For the balance of the year, the company will be scaling back production in line with demand for our agriculture products,” Chief Executive Samuel Allen said in a statement.
Deere said though the agriculture economy remained in a “relatively healthy state,” weaker commodity prices have led to lower income for farms. That decline is putting pressure on demand for farm equipment, especially larger models.
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