World demands Q-C implements
Unit sales for all categories of farm tractors in 1997, were nearly 12 percent ahead of 1996, according to the Equipment Manfacturers Institute in Chicago.
An estimated 128,591 tractors sold in the United States and Canada through December 1997, compared with 114,995 in 1996.
Sales on four-wheel-drive tractors drove in 5,908 for the year, a 33.5 percent increase over the 4,427 sold during the comparable period in 1996, EMI said.
About 9,662 combines sold through December 1997, a 7.2 percent increase over the 9,016 units sold in 1996, EMI said.
Moline-based Deere & Co. posted a record $960.1 million in net income for fiscal 1997, which ended Oct. 31, compared with $817.3 million the year before.
Deere chairman Hans Becherer attributed the higher results to strong worldwide demand for the company's products. Worldwide demand for John Deere agricultural equipment products remained strong as a result of favorable fundamentals in the farm economy, he said.
More farm acres were planted and favorable weather resulted in historically high levels of production, Deere said. The demand for grain and oilseeds were expected to reduce carryover grain inventory and boost grain and soybean prices.
Overseas demand for John Deere ag-equipment remained strong, reflecting good demand from the republics of the former Soviet Union and favorable market conditions in Latin America.
Despite recent economic instability in some of the world's financial markets, overall fundamentals were expected to remain favorable for farm equipment sales in 1998, Mr. Becherer said.
Besides the record earnings, Deere announced several significant business decisions in 1997.
Last April, Deere unveiled its plans to build a Tournament Players Club golf course in Silvis and supply the PGA Tour with golf and lawn-care equipment.
The new John Deere Commons and Pavilion opened in August on Moline's River Drive.
In October, Deere and the United Auto Workers Union signed a six-year labor agreement that would preserve existing jobs and create a new generation of John Deere workers. John Deere is the largest employer in the Quad-Cities with about 7,491 workers.
Deere also said it would make tractors and other farm equipment using composite materials from soybean oil. The company bought a minority interest in its long-time partner, a Louisiana sugar-cane harvesting company, to gain entrance into that market.
The Quad-Cities other farm-equipment maker, Case Corp. of Racine, Wis., operator of a combine and cotton-picker assembly plant in East Moline, is expected to report a strong ending to its 1997 fiscal year in late January.
``Our business has been good through the first nine months and we expect the fourth quarter to be in line with that,'' company spokesman William Masterson said. ``Retail sales were strong for Case and the equipment manufacturers industry.
``We outperformed the industry in combine sales in the fourth quarter and we did very well overall,'' he said.
Case's third-quarter net income rose 26 percent from $62 million in 1996 to $78 million in 1997 on a record-setting quarter for sales of $1.4 billion. Each of Case's four geographic regions contributed to the sales increase, led by very strong gains in Latin America and Europe.
Last fall, the company announced an expansion of its European ag-equipment business through agreements to buy a German company, the design, assembly and distribution rights to two other German companies, and a sprayer firm in the United Kingdom.
As a result, Case will supply its European customers with conventional combines and hay and forage equipment.
Case also introduced 17 new models of farm equipment and completed a $78 million sale of combines, high-horsepower tractors and related parts to the Ukraine.
In recent years, Case has sold nearly $400 million of ag-equipment in Central Europe and Central Asia.
-- By Rita Pearson (January 22, 1998)
Copyright © 1998 Moline Dispatch Publishing Company, L.L.C.