ROCK ISLAND, Ill. — In its third-quarter earnings call, Deere & Co. reported its worldwide net sales and revenue decreased 17% for this quarter and 11% overall for the fiscal year. It's predicting its largest decreases in its production and precision ag and small ag and turf categories, with sales down 20-25% for the year. It's also forecasting net sales for construction and forestry will be down 10-15%.
Net sales in construction and forestry declined 13% in the third quarter compared to the same period last year. Deere attributed it to lower shipment volumes.
At Martin Equipment, a John Deere construction dealership, owner Bobby Martin III is predicting a similar decline in its sales but said business is steady overall.
"Me, personally, I say 10%," Martin said. "10% down from last year, just under, seems about right. But then also last year was kind of a high year, so we're just down to a normal year right now."
After years of supply chain issues, he said inventory levels are back to normal. New sales are trending up and used sales are leveling off, while prices for used construction are also decreasing, Martin said.
"I would say the trend in there is that it's kind of all leveling off to normal," he said. "I think business is still going strong. There's still this fear, this pending, you know, something could happen, or this cliff, and there's a lot of the political uneasiness of what's going to happen, how it's going to play out, but I think everything's still going. People are definitely pulling back a little bit, being a little timid, little waiting to see how things are going to play out. And I think they're a little insecure too with the interest rates being so high, but I think as those come down, once we get past this election, I think things will settle down. It looks like everything is going to be a little less than the last year or two, but steady, at least for us."
Martin Equipment President DeLene Martin Bane agrees that election cycles can cause uncertainty in the market, but isn't concerned about its impact on the company's bottom line.
"We have felt a little bit of a softening, but when you really look at the overall industry, which is what we look at, it stayed pretty steady," she said. "We've come off some pretty strong years and so maybe we feel it a little bit more than what's actually happening. But there's a lot of construction work in our territory going on and a lot for the future. We still feel pretty strong about the construction industry."
U.S. Rep. Eric Sorensen, D-Illinois, toured the facility ahead of a planned meeting at Deere's World Headquarters. While Martin Equipment isn't feeling the trickle-down from Deere's downturn, he's hoping that remains the case for other Quad Cities businesses.
"As we go forward, the folks that are still employed, they have to know that their job is going to continue to be here, that we're fighting to make sure that those jobs will always be here and not just be shipped overseas or to a different country," he said. "One of the things that I want to be able to do is learn today and understand today and hear the commitment from Deere that it will be here and also that we can meet the challenges as the ag sector changes."