John Deere sees challenges in the market, but invests in technology and sustainability

John Deere faces a challenging scenario in Brazil and Latin America. According to Antonio Carrere, the company's vice president of marketing and sales for the region, the grain and cotton markets present different realities, reflecting the climatic and economic variations that directly affect the production and profitability of farmers.

He highlights that the 2023/24 harvest has had a major impact on the agricultural sector in Brazil. Soybean production, for example, has suffered a significant drop due to adverse weather conditions in both the South and North of the country. Cotton, on the other hand, despite maintaining good productivity, is facing difficulties due to falling prices, which has affected producers' profitability.

These factors, combined with a decline in farmers’ profit margins, have had a direct impact on John Deere’s machinery sales. The executive points out that, after a period of atypically high margins during the pandemic, the agricultural sector is returning to a level of normality, which implies tighter margins. As a result, the company’s agricultural machinery sales fell compared to the previous year.

Despite this scenario, Carrere emphasizes that farmers are increasingly focused on smart investments, prioritizing the purchase of technological solutions that can increase efficiency and productivity. He highlights the fundamental role of technology in this process, citing John Deere's advances in artificial intelligence, computer vision and machine learning, which are being integrated into the company's machines to offer greater sustainability and profitability to producers.

John Deere’s communication with its customers and potential customers has also adapted to this new reality. Carrere emphasizes the company’s strong investments in technology, including the development of ethanol engines, which especially benefit Brazilian producers. In addition, he mentions John Deere’s partnership with SpaceX, which aims to ensure connectivity in any region of Brazil from 2025, allowing the company’s machines to operate at full potential, even in remote areas.

Regarding the outlook for the 2024/25 harvest, Carrere indicates that John Deere sees a global market impacted by lower demand for agricultural commodities, which should further pressure producers' margins. However, he highlights the importance of continuing to invest in the long term, both on the part of producers and John Deere itself.