It's a good time to be John Deere
An Iowa farmer pulls a corn planter behind his John Deere tractor. With the increase in demand for alternative energy, some farmers have elected to switch to growing corn to produce more profitable ethanol fuel.
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Scott Jagow: The tractor company John Deere turns in its profit report this morning. John Deere's fortunes tend to rise and fall with demand for crops like corn. And these days, that means ethanol. Gabriel Spitzer reports from Chicago Public Radio.
Gabriel Spitzer: There's been some hand-wringing lately about whether the ethanol boom might be sputtering.
But Morningstar analyst John Kearney says that anxiety hasn't spread to many corn farmers. So, he says, a bullish ethanol market should translate into solid earnings for John Deere.
John Kearney: It's going to help to line the farmers' pockets with more cash, which is good for Deere because it gives those farmers more buying power to go out and buy new equipment, more sophisticated equipment.
Steve Pitstick farms corn in northern Illinois. He says he just bought a John Deere 8420 model tractor last spring.
Steve Pitstick: In the last year the farm economy has gotten more like it's supposed to be, and we've been able to upgrade machinery closer to new stuff, instead of being two generations removed.
Analysts polled by Thomas Financial predict profits of $1.99 a share for John Deere. Its stock is up some 23 percent for the year.
In Chicago, I'm Gabriel Spitzer for Marketplace.