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Farm equipment maker Deere & Co DE-N forecast 2024 profit below analysts’ expectations on Wednesday as high borrowing costs and squeezed budgets dented demand for its products.

Its shares were down 5.6% in premarket trading.

The world’s largest farm equipment maker expects 2024 net income between $7.75 billion and $8.25 billion, compared with analysts’ average expectations, according to LSEG data, of $9.33 billion.

Demand for its large tractors and combines has allowed the company to increase prices to help offset higher raw materials, logistics and freight costs.

However the mounting dealer inventories that the company noted in previous quarter are becoming a red flag to investors, analysts say, leading to speculation demand might have peaked for the manufacturer and other cyclical industrial companies.

Persistent inflation continues to drag on consumer appetite for big-ticket items. Experts say weaker consumer sentiment is a sign Americans are being more frugal, including farmers.

Net farm income is forecast to decline 18.2% from a year ago, according to the Agriculture Department.

Deere’s net income rose to $2.37 billion, or $8.26 per share, for the quarter through October from $2.25 billion, or $7.44 per share, a year earlier.

Total net sales and revenue fell about 1% to $15.41 billion for the fourth quarter ended on Oct. 31.

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