A strike of workers at Deere & Co., a farm machinery company, which has run for weeks, has left dealers prepared for delivery delays and farmers fearing higher prices.
Last week, members of sindicato United Auto Workers (UAW) rejected a second proposal, raising uncertainties about the fall crop, when regular production can resume.
A producer of corn, Soy and Other Crops, which covers about 10,100 hectares in eastern North Dakota, said it ordered three Deere tractors and two sprayers before the strike but has so far not received everything it bought.
Deliveries of some equipment have been delayed for months and it is unclear when the rest of the order will be received, he said, adding that he fears the strike could further complicate the situation.
According to the farmer, the late delivery of his sprayers could harm agricultural production next year, as his older equipment cannot apply chemical products with the same precision as the new machines. “This will have a big impact on profitability and production results,” he said, who depends exclusively on the company’s equipment.
Deere declined to comment on equipment inventories and deliveries. The company said it would continue to operate its US plants with supervisors and other non-union employees, and that the company is considering sourcing replacement parts and machinery from its overseas plants.
Dealers say they are only receiving some equipment from Deere factories, while non-union workers put the finishing touches on machines that have been parked at the automakers waiting for parts to arrive.
A economy The reinvigorated agricultural sector is driving demand for new equipment. In the first three quarters of the current fiscal year, Deere’s sales increased 27% from a year ago, and net income more than doubled to $4.7 billion.
The company expects to earn about $5.8 billion for the full year. Shares of the company on Friday closed up 1.2% to $355.20.
Deere equipment prices are 8% higher for pre-orders for 2022, according to the company.
JP Morgan estimated that the company would have to raise prices by 1.5% to cover higher labor costs after the job offer was turned down by company employees.
O US Department of Agriculture (USDA) projected in September that net farm income would increase 20% this year to $113 billion, the highest since 2013, while farm production expenditures would increase by more than 7%.
Source From: Moneytimes
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