Nov 21 Reuters Deere Co forecast its 2025 profit below market expectations but reported an upbeat quarterly earnings on Thursday, as lower production costs helped cushion a downturn in farm equipment demand, sending its shares up 8.

A cooloff in raw material prices and reduced freight expenses have led to a yearoveryear fall in production costs, Deere said on an analyst call.

Deere shares, which hit their highest levels in more than a year, also got a leg up from market sentiment that the company39;s 2025 profit expectations were conservative, CFRA analyst Jonathan Sakraida said.

A decline in farm incomes and high interest rates have compelled farmers to reassess large expenses on agricultural machinery and forced dealers to limit inventory restocking, leading the company to provide a downbeat forecast.

U.S. farm income is expected to fall for a second consecutive year in 2024, as farmers grapple with corn and soybean prices hovering near fouryear lows.

We expect farm fundamentals to remain depressed globally in 2025, putting additional pressure on farm profitability, CFO Joshua Jepsen said.

The world39;s largest farm equipment maker expects its 2025 profit to be between 5 billion and 5.5 billion, compared with analysts39; average estimate of 5.93 billion, according to data compiled by LSEG.

For the year, the company expects its net sales to fall in the range of about 10 to 15 across all machinery segments.

Concerns around supply chain and a surge in demand led…