DEERE ISN’T DEAR TO CUSTOMERS, The headline in the WSJ this past weekend read, “To Avoid Profit Squeeze, Deere Will Raise Prices.” Did you know that a modest-sized farm tractor costs $260,000. to buy now.
So, to guarantee their continued profits, Deere will raise prices even further and sock it to the hapless farmers who need to buy new equipment this year. The problem is, the farmer rarely has the opportunity to raise their prices to make up the cost differential. And, it gets even more callous – “Deere executives said they had to pay more to get their shipments made early this year, pushing up transport costs. [Sounds like a management issue to me! – Insert by post publisher.] They said they would raise prices to reflect that and higher steel prices as Deere starts taking orders on 2019 orders later this year.” So, for management insufficiencies, they’ll just solve the matter by . . . raising prices. Generally, that’s done by replacing those in charge. And, then, this, “We do expect the pricing we’re going to take for 2019 to be more than offsetting the inflation we’re seeing.” This cheerful note from Josh Jepsen, Deere’s director of investor relations. Deere now expects net income of about $2.3 billion for the year, up from its previous estimate of $2.1 billion. And predicts that overall sales of farm and construction equipment will increase by about 30% this year to about $33.7 billion. How sweet. But not for the customers. Seems there comes a time when costs aren’t always just “passed along;” maybe a happy medium is struck – ? Where’s the Deere Board of Directors and their moral sense in this mix of profound money-grubbing?