John Deere says it will slow production output at certain facilities by as much as 20 percent year-over-year during the second half of 2019. Reasons for the decision range from trade uncertainty to a host of other issues pressuring the Ag industry.
Director of Investor Relations Josh Jepsen says output reductions will mainly focus on large equipment in the North American market. Cory Reed, President of John Deere Financial, points to a lack of trade dispute resolution, as well as wet weather conditions and African Swine Fever as reasons to lower production. Reed wants the company to position itself well for 2020 by the end of this year.
Higher freight costs, including some air freight charges to bring in parts, as well as unfavorable product mix and overall uncertainty, along with upcoming decreased production volume, are all causing manufacturers to drop their margin projections in the industry by one percent this year.