No, Dorothy, this isn’t Kansas anymore — and you’ll need more than courage to make it back home from the worst farming slumps in history. According to the American Bankers Association’s Ed Elfmann, the USDA is “predicting a 27% drop in farm income over the next year” — and the world’s largest tractor manufacturer is taking swift action. As Deere grapples with plummeting demand, it’s cutting costs and bracing for a hard landing in the once-thriving US farm economy, which had previously benefited from soaring crop prices.
- Deere has laid off more than 2K production workers and trimmed hundreds of salaried employees — a 15% reduction in its hourly workforce since November.
- The company’s profit fell 42% in the latest quarter, with equipment sales down 20%. After nearly doubling in 2020, its stock has fluctuated since 2021 and is currently down ~11% over the past year.
Field of nightmares: The House Agriculture Committee recently heard emotional testimonies from experts highlighting the severe challenges facing agriculture. Dana Allen-Tully, a diversified farmer from Minnesota, warned of a “perfect storm” of declining crop prices, high production costs, rising interest rates, natural disasters, and tightening credit. With grain prices now at their lowest level since 2020, machinery provider AGCO’s CEO expects 2024 to be a “big correction year.”
