“We are seeing demand shifts in production of precision ag, impacting combines and large tractors, which is felt mostly in the back half of 2024.”

In context

“expect price realization to moderate throughout the remainder of the year in line with our annual guide of 1.5 points for both segments. Relative to production costs, we saw material and freight coming lower for both large and small ag, leading to favorable year-over-year comparisons for the quarter. This is aligned with our expectations to see slightly favorable production cost compares for both segments for the full year. Looking at SA&G, we had unfavorable impacts in the quarter from incentive compensation, timing of spend, which pulled costs forward into the quarter and foreign exchange. Notably, we don't expect the first quarter to be indicative of our SA&G run rate for the rest of the year, as we're pulling levers in line with the rest of our operations. Shifting to our outlook. We are seeing demand shifts in production of precision ag, impacting combines and large tractors, which is felt mostly in the back half of 2024. Conversely, we're seeing minimal change to our small ag and turf outlook from last quarter, as the dairy and high-value crop segments remain stable. It's important to reiterate here that our plans in large ag to produce to retail demand in North America and underproduced retail in Brazil and Europe, reflect our commitment to inventory and cycle management. This approach should position us well going into 2025 across all geographies. Aaron Wetzel: This is Aaron. I'd like to add quickly. I believe the key opportunity here is our proactive management of production levels to adjust for the changes we are seeing in our end market demand. We have been highly effective in managing through the changing market dynamics in the U.S., and we'll continue to remain focused on disciplined execution o”