The company is reviewing its options in offering this protection as it works to stay on top of a struggling industry.
Deere has been selling crop insurance for eight years, but is now reviewing this part of its business and is considering withdrawal from that market as the well recognized tractor and farm equipment manufacturer continues its struggle in a farm economy that seems to be refusing to recover.
The company has stated that it intends to review strategic options when it comes to this coverage unit.
That said, Deere also stated that it has not yet made any formal decisions with regards to its crop insurance unit, nor has it come to any agreements. The company has not provided a specific reason for its review of the unit, which currently operates under the name of Deere Insurance Co., which is a branch of the John Deere Financial company. This organization, which is the biggest farm equipment producer on the globe, when measured by sales.
It is now looking into developing a strategy that considers all of its businesses, including crop insurance.
This business has been struggling with a slip in its revenues as farmers have been choosing not to purchase expensive new equipment products, as there are attempting to limit their spending during a time in which they have lower harvest and commodity price expectations.
Last month, the earnings release that it produced showed that it had cut back its own expectations and cautioned that productions may need to be trimmed back, as well, as the fiscal third quarter watched both profits and revenues drop. Deere has now also explained that it had been anticipating reduced margins from its farming insurance unit, and that this would have an impact on the overall profit that would be seen within its financial services businesses.
The financial business, as a whole, brought in a revenue of $656 million within the third fiscal quarter, making up 6.9 percent of the total top line of that company. One component of that has been the crop insurance that it has been selling for over three quarters of a decade, with products that include both private coverage, and those that are government backed.