“Looking forward, Deere inventory levels have recovered and are now in line with the industry. We expect slightly stronger sales through the back half of the year, which is embedded in our updated outlook.”

In context

“inue to remain focused on disciplined execution of our pricing strategies in order to maintain performance as we move through the cycle. Josh Rohleder: Thanks, Aaron, and Josh. That's really helping bridge between the ag industry outlook and our tier forecast. Let's shift now to Construction and Forestry, which we haven't really touched on yet. Results for the quarter came in better than expected with margins slightly off year-over-year compares given flat sales levels. Josh Beal, can you walk us through how activity in the quarter has impacted our 2024 outlook? Josh Beal: Absolutely. The key takeaway from the quarter is that underlying demand is stabilizing at levels higher than expected, while at the same time, the industry has become more competitive, given inventory availability. Looking forward, Deere inventory levels have recovered and are now in line with the industry. We expect slightly stronger sales through the back half of the year, which is embedded in our updated outlook. Demand will be driven by key end markets, where optimism remains strong. All of this is reflected in our order books, which for Construction and Forestry are full through the second quarter across most product lines, with compact construction equipment notably full through the end of the third quarter. Josh Jepsen: This is Jepsen. I'd like to emphasize quickly the runway that remains on government infrastructure projects in the U.S. Through 2023, roughly 40% of the IIJA dollars have been awarded, but relatively minimal amounts have actually been spent thus far. Needless to say, we expect infrastructure spending to provide a strong tailwind well into '25 and '26 across both our construction and road building segments, as dollars are awarded and projects commence. Josh Rohleder: Thanks fo”