John Deere is optimistic that the fundamentals underlying the agriculture economy remain strong, but the company is in limbo gauging demand for replacement equipment until the U.S. and China reveal an outcome of the trade war.
Investor Communications Manager Brent Norwood said on the company’s recent earnings call that Deere expects sales growth in the U.S. and Canada this year could be flat, or it could be up to 5%. The wild card is trade uncertainty.
On the call, analyst and executives discussed whether the changes to trade flows occurring in response to the changing tides of tariffs may be permanent, even if the trade war subsides. “We’ve always said, the trade routes will be realigned and the trade flows will readjust and it’s going to be bumpy when that happens for a couple of years,” CFO Raj Kalathur said.
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