When does this end? John Deere announced another round of cuts that has some farmers warning that they will buy elsewhere. A well-known figure in the used tractor business said that farmers are now looking for older machinery to offset the high cost of new. And a prominent investment manager said that U.S. leaders and investors need to view China as what that country really is.
More Job Cuts
This week brought another notice that John Deere would cut workers. This time, it is 287 workers at Harvester Works in East Moline, Illinois, 80 employees at Davenport Works in Davenport, Iowa, and seven more in Moline Seeding in Moline, Illinois.
That puts the recent layoffs at more than 2,000. John Deere claimed again that the lost jobs are not related to its decision to produce more equipment in Mexico rather than the United States.
RELATED: KWQC-TV in Davenport, Iowa, covered the latest job reduction and has comments from a John Deere spokesperson. See that here.
The company said that sales have declined 20% as farmers adjust to declining incomes after record revenue surges in 2021 and 2022.
The Daily Mail has an article with farmers warning boycotts of John Deere tractors because of the company’s decision to get rid of workers in the U.S., expanding production in Mexico, while maintaining billions of dollars in annual profits.
It is difficult to know how many of those farmers would follow through with threats to buy a tractor somewhere else or whether they are just expressing frustration on social media.
Old School
What is old is new again based on what “Machinery Pete” is seeing lately. Greg Peterson founded MachineryPete.com in 1989 to buy and sell used farm equipment.
Recently, he saw a tractor for sale that listed for $1.3 million and wondered how much higher new farm equipment can go. Peterson acknowledged that he has thought that numerous times before in the past and farmers kept buying more expensive new options.
But he is seeing farmers buying older and simpler models of tractors to deal with economic pressures. Now, of course, Machinery Pete is in the business of used equipment, so he is bound to express support for buying used. However, he also pointed out how some older models have sold for thousands more than they did in the past.
RELATED: Read Machinery Pete’s perspective on what he has seen happening with some older tractors here in this article from Farm Journal.
Remember China
There is a lot of international drama, escalation, and aggression elsewhere in the world. But don’t forget about China, warns Kyle Bass, founder and Chief Investment Officer at Hayman Capital Management.
And don’t forget that China is not an ally, he adds.
“You’ve got Russia being increasingly provocative in Ukraine and you have Israel and Iran at each other’s throats. And now almost on cue, you see China move in with this third simulation exercise of the assault of Taiwan in the last two years,” Bass said during an interview on CNBC’s “Squawk Box.”
“It is unfortunately hinging right around the U.S. election.”
Those other conflicts merit U.S. attention. But Bass feels like U.S. leaders and Wall Street investors are not treating China like the threat that it is.
