John Deere Raising Prices to Cover Steel Costs

Deere & Company is raising equipment prices in order to protect profits as costs rise. The farm and construction machinery manufacturer says profits were up 50 percent and equipment sales were up 34 percent annually in its latest quarter.

However, a Dow Jones report says those numbers disappointed analysts. Deere’s share rose nearly six percent as investors are focusing on Deere’s strong outlook for sales growth this year. Rising expenses in recent quarters have weighed down Deere’s performance, even as machinery demand picks up.

Deere joined a number of U.S. manufacturers in reporting rising costs as a growing U.S. economy drives up the prices for materials and shipping. Prices for steel and aluminum have been pushed up by U.S. tariffs on imported metal products.

Deere says it will raise prices because of both higher production costs, as well as increasing transportation costs, as it begins to take orders on 2019 models. The company predicts overall sales of farm and construction equipment will increase by 33 percent this year to $33.7 billion.

From the National Association of Farm Broadcasting News Service.