Will farmers stick with President Trump?
When we read about farmers feeling the pinch in their profits due to the trade war with China, we think of farms and crops. A part of the economic story sometimes overlooked is that of companies who depend on agricultural sales, the companies that service farm communities, like Deere & Co. It was announced Friday that the company’s quarterly earnings missed Wall Street expectations. The agricultural equipment manufacturer is feeling the effects of the trade war between the U. S. and China. Since the beginning of the year, Deere stocks have declined 2% and nearly 1% in the past twelve months.
The agricultural equipment manufacturer posted revenue of $11.34 billion in the period. Its adjusted revenue was $10.27 billion, which beat Street forecasts. Four analysts surveyed by Zacks expected $10.15 billion.
Deere is considered a bellwether for the agricultural industry. Sales growth had previously been predicted at 4% this year by Deere but now, thanks to the effects of damage from U. S. duties on Chinese imports, the company’s prediction has decreased to 2% sales growth. The White House is standing firm in pressuring China’s President Xi Jinping for a deal by using tariffs while farmers are beginning to describe conditions in the agricultural economy as the worst since the 1980’s. Farm foreclosures soared as interest rates climbed and crop prices sank. During that time, with President Carter in charge, there was an embargo on crop sales to Russia in place. Also, there are weather-related problems for farmers.
“In addition to persistent uncertainty around global trade and market access, farmers are also contending with weather-related planning delays and uncertain near-term demand prospects,” Chief Financial Officer Ryan Campbell told investors on an earnings call. “The resulting decline in commodity prices has taken a toll on farmer sentiment, and correspondingly, our large agriculture sales forecast has come down.”
Farmers place much of the blame on Trump’s tariffs, some of which were doubled this month, and Beijing’s levies on goods from American states that supported the president.
“The stakes have never been higher than they are right now,” Matt Huie, who grows cotton, corn, and livestock in Beeville, Texas, told a panel of the House Agriculture Committee earlier this month. “I didn’t live through the ’80s.
