Deere and Co., the world’s largest maker of agricultural machinery, reported sharply lower quarterly earnings May 20 as lower crop prices and farmers’ concerns about the global recession weighed on demand.
Deere said a number of factors contributed to a 38 per cent decline in its second-quarter results, including higher raw material costs, the strong dollar and increased provisioning for credit losses at its finance arm.
But the big culprit was a decline in demand for its machines – a drop that was especially dramatic outside the U. S. and Canada.
“Emerging markets had been the steroids for growth for agriculture and construction over the past couple of years,” said Lawrence De Maria, an analyst at Sterne Agee in New York, “and emerging markets are now dead. There’s no financing.”