Deere & Co., the world's largest maker of farm tractors and combines, forecasts lower prices for corn, wheat, soybeans and cotton in 2012 and 2013. Deere also expects a drop in U.S. farmers' income for the year.
Corn will drop to $5.30 a bushel in the year that starts Sept.1, after the U.S. harvest, compared with $6.40 a year ago, the Moline, Ill.-based Deere said Wednesday in an earnings presentation. The forecast was unchanged from a Nov. 23 estimate.
Wheat will drop to $6.70 a bushel, down from $7.40 a bushel in the year-ago period. That's slightly up from $6.60 a bushel forecast in November.
Soybeans will decline to $10.50 a bushel, lower than $13 a year earlier and a November forecast of $11.25.
Cotton is expected to drop to 75 cents a pound, compared with 88 cents in the prior year and unchanged from the November forecast.
With the drop in prices, U.S. farm cash receipts are also heading for a decline.
Crops farmers are expected to earn $200.4 billion in 2012, down from $209.3 billion earned a year ago and lower than the $207.7 November estimate.
Livestock farmers will receive $162.2 billion, compared with $163.1 billion and up from a more pessimistic November estimate of $157.2 billion.
Government payments will drop to $9.3 billion in 2012, down from $10.7 billion in 2011.
Total cash receipts will come in at $371.9 billion, down from $383.1 billion recorded in 2011.
Deere reported Wednesday a 3.7 percent profit increase in its fiscal first quarter boosted by strong U.S. farming income. However, less income for U.S. farmers could hurt Deere's sales performance, as farmers hold back on their demand to update their aging fleet.
Shares of Deere & Company (NYSE:DE) closed down 5.36 percent, or $4.77, to $84.28 in Wednesday's trading.