John Deere 2010 Annual Report Download - page 4

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4
Powerful Tailwinds Shaping Plans
As we’ve pointed out in previous messages, powerful global
economic trends are lending support to our current performance
and future prospects. The world’s population continues to grow,
adding many thousands of new mouths to feed every day.
Of equal importance, rising prosperity, particularly in developing
economies such as China and India, is leading to a greater need
for food and energy.
As a result, worldwide stocks of key farm commodities have
fallen near historic lows in relation to use. Grain prices have risen
in response, propelling farm incomes to unprecedented levels.
The combination of low grain reserves and higher global demand
bodes well for crop prices over the long term. This, in turn,
should help sustain our customers’ profi tability and support
further profi table growth for John Deere.
It is widely believed that agricultural output will need to double
by mid-century to satisfy demand – and do so from essentially
the same amount of land – requiring further advances in farming
mechanization and productivity. In our view, John Deere is uniquely
positioned to meet this challenge and is investing accordingly.
At the same time, more people are moving from rural areas
to cities, increasing the need for infrastructure development.
Today, more than half of the world’s population resides in urban
areas. That percentage is expected to reach 70 percent in the
next 40 years – meaning that more people could be living in cities
by 2050 than now make up the world’s entire population. Such a
migration will lead to tremendous demand for roads, bridges,
and buildings – and for the equipment needed to construct them.
The implications for our company are both clear and compelling:
Trends of this nature should help support demand for innovative
farm, construction, forestry and turf-care equipment for years,
if not generations, to come.
Introduced in 2010, the John Deere 5036C tractor was designed and built
in India to help increase mechanization and food production. The two
5C models, with 35 and 41 horsepower, are the fi rst John Deere tractors
designed in India. Engineering and design responsibility for the company’s
entire global utility tractor line was transferred to India in 2010.