(Bloomberg) -- Deere & Co. shares slid the most in 18 months after the company forecast smaller-than-expected profit next year, with slowing equipment demand from farmers starting to weigh on the world’s largest tractor maker.

Net income for the fiscal year will be between $7.75 billion and $8.25 billion, Deere said Wednesday after reporting fourth-quarter earnings that beat analysts’ expectations. Its full-year outlook came in well below estimates compiled by Bloomberg of $9.32 billion, prompting the stock to drop as much as 7.1%.

Declining crop prices have hit machinery makers in recent months, with farmers less willing to buy new equipment for planting and harvesting. While demand for new tractors remains elevated, there are concerns that production of farm equipment could start outstripping demand.

Rival farm machinery maker CNH Industrial NV recently said it was reducing salaried workers with equipment sales slumping. Seed maker Corteva Inc. has also warned of a slowdown in demand from farmers. Deere on Wednesday said net sales next year could drop 15% to 20% in its largest segment of production and precision agriculture.

“Deere’s widely disappointing 2024 guidance suggests a weaker ag-equipment market than we previously contemplated,” Bloomberg Intelligence’s Christopher Ciolino said in a note.

Machinery demand has softened especially in Brazil, where farmers harvested the country’s biggest soybean and corn crops ever. The large hauls meant farmers were getting lower prices for their crops even as equipment and seeds costs kept rising.

The inventory imbalance is now causing farm suppliers to cut back. It’s a reversal from last year, when supply chain disruptions from Russia’s invasion of Ukraine resulted in record profits for the agricultural sector.

In Brazil, Deere and the rest of the industry “ended up building more inventories than planned, even though we pulled back production in 2023,” Deere Chief Executive Officer Josh Jepsen said on a Wednesday call. “Therefore, we will underproduce demand next year.”

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