The global agricultural market is close to the bottom


The global agricultural market is close to the bottom

Home > The global agricultural market is close to the bottom


The global agricultural market is close to the bottom

US agricultural machinery giant Deere company said on Friday that there are signs of stabilization in key agricultural markets, including strong growth in Brazilian agriculture.
At the same time, the second-hand equipment market seems to have stabilized, making the company more optimistic about the current fiscal year outlook.
Deere raised its revenue forecast for 2017 fiscal year to 4%, compared with a 1% drop in November last year.

“There are signs that large agricultural markets are nearing the bottom,” said Jorge Jepson, an investor relations manager at Deere, in the company’s first quarterly revenue conference.

As the price of major crops, especially corn, is always low, the US agricultural market has been struggling since 2012, and this bad situation has reduced farmers’ incomes. Which also led to the continued decline in farmland prices.

But the trend seems to be improving, in the 2017 income outlook is expected to increase at the same time, Deere will be the annual net profit is expected to increase to 100 million US dollars. $ 1.5 billion in revenue is clearly outstripping analysts’ estimates of $ 1.3 billion.

Stephen Jeff, an analyst at Jefferies, said the updated forecast meant that Deere’s earnings per share would be $ 4.75 instead of $ 4.40 before. Reuters and Wall Street analysts are generally expected to be $ 4.53 per share.

Deere’s share price rose about 3.5% before the session, but soon lost momentum, then lower, the latest transaction reported US stocks 109.65 US dollars. The stock has risen more than 30% in the past 12 months.
The company expects global sales of agricultural and lawn equipment business to increase by about 3% for the year, compared with a 1% decline. Brazil’s improvement is a major reason to change expectations.

Jepsen said Brazilian farmers’ profitability is still at a good level because their crops are sold in US dollars, Brazil’s fundamentals are improving and Brazil’s agricultural production crop value is expected to increase by about 8 percent in dollar terms Benefiting from a record acreage and an expected rate of return.

The industry also benefited from the Brazilian government’s support for the country’s agricultural finance program, which is now becoming more competitive with US agriculture.

However, in the United States and Canada, Deere is still expected retail sales of agriculture and turf is still difficult, in 2017 will drop 5% to 10%. The same as the previous forecast. But South American agricultural sales are expected to grow 15% to 20%, which is expected to grow by about 15%.

Deer’s chief financial officer, Rajesh Kalathur, said Argentina and Mexico were selling more enthusiastic.