“Within South America, we anticipate industry sales of tractors and combines will remain flat in 2026.”

Why this grade

Before the flat outlook came due, management revised South America tractor and combine industry sales guidance down from flat to approximately down 5%, a downward revision to the earlier commitment.

Deviation basis: percentage point shift in industry sales outlook, from flat (0%) to down ~5%

In context

“ments in new machinery. However, strong crop yields and consumption, new trade agreements, growing demand for biofuels, and supportive government payments support potential upside. For small ag and turf in the U.S. and Canada, industry demand is estimated to be flat to up 5%. The dairy and livestock sector continues to generate profits driven by strong beef prices. Additionally, a modest recovery in turf is anticipated, following a rebound in the housing market and growth in the overall economy. In Europe, the industry is projected to be flat to up 5%. The outlook for the dairy sector continues to be robust, with stabilizing interest rates helping to support investment decisions. In addition, margins for arable farmers are strengthening as crop yields recover in major European ag markets. Within South America, we anticipate industry sales of tractors and combines will remain flat in 2026. While soybean and corn acreage is expected to grow at a trendline pace in Brazil, customer demand for equipment has been tempered due to the high-interest rate environment. Additionally, strong global crop yields are weighing on prices, and the recent trade agreement between China and the U.S. creates uncertainty around demand for Brazil exports of soybeans. In Argentina, industry growth is anticipated to moderate after robust growth in 2025. Industry sales in Asia are expected to be down 5% following slight gains in India last year. Moving to our segment forecast on Slide eight. We anticipate Production and Precision Ag net sales to be down 5-10% in fiscal year 2026. The forecast assumes roughly 1.5 points of positive price realization and about 1.5 points of positive currency translatio”