John Deere looks to benefit from the recent rise in U.S. farming income and record crop yields. With their increased earnings and newfound disposable cash, farmers hope to invest now in equipment and technology as they have the funds and analysts are predicting U.S. farm output will continue to climb.
Commodities like grains and soybeans are at record levels and farmers across the country are taking the time to invest in new equipment to ensure future growth. Joe Spatafora, a farmer in Mexico, Missouri, tells the Cattle Network that the "last three years have been really good to farmers in our area." Spatafora asserts that if "you don't reinvest in your machines when you can, you'll fall behind."
This sentiment is shared by many farmers. The Association of Equipment Manufacturers reports that October 2010 combine sales are up over 24 percent from year-ago levels, while overall, farm tractor sales have increased by 5,000 units from 2009. The largest worldwide manufacturer of farm equipment, John Deere and Co., reported its third-quarter earnings surged 47 percent as farmers replaced their used tractors with new items.
Analysts are bullish on farm growth for the next year as commodity prices continue their upward path.