In a July 30, 2023, article in Crain’s Chicago Business, CNH Industrial said it’s getting harder to pass price increases on to customers. In the wake of Russia’s invasion of Ukraine in 2022, which disrupted grain exports and caused wheat prices to hit record highs, many farmers have been upgrading machines, Crain’s said. However, as harvests and prices normalizing while interest rates rise, farm profits are easing.
“We’ve been clear we have no intentions of decreasing pricing, but we think limiting how much we increase it is probably the right thing to do at this point,” says Scott Wine, CEO of CNH Industrial, in the article.
Used inventory of crop-cutting combines is increasing in North America, said Crain’s. In Ukraine, where CNH has a large market share, farm equipment sales have dropped by 50% this year, Wine says.
Crain’s cited CNH’s Q2 earnings report, saying shares of CNH fell by as much as 7.4% after it missed even the lowest analyst estimate for revenue in the second quarter. It added that sales of ag equipment, which account for most of the company’s business, trailed the mean analyst forecast by 6.3% while the company is still expected to hit a record of over $19.5 billion this year.
Crop prices are “down from a high, but I think we’re still at reasonable levels there,” Wine says. “Overall, the farmer income levels are still quite strong.”