Deere and drought: An outlook for crop demand

AP News
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Posted: Aug 15, 2012 12:35 PM

Severe drought in the Midwest is shrinking crop sizes, hurting farmers' wallets and driving up prices of corn and other goods for consumers. Deere & Co. said Tuesday that although conditions are leading it to be cautious in its outlook for the next several months, it could end up being a boon for equipment makers and farmers next year.

Here are some positive factors Deere thinks will result next year from one of the worst droughts in 50 years:

—Higher crop prices. The price of corn jumped 34.5 percent in July from June, the largest gain since Oct. 2006.

—Higher crop yields, as farmers play catch up to demand.

—Rapidly increasing demand for agricultural equipment, as farmers' financial conditions improve

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