Farm machinery stocks drop after USDA reports high crop yields

Patrick T. Fallon | Bloomberg | Getty Images

A farmer unloads harvested corn in Marshall, Missouri.

Investors are scrambling to sell off farm stocks amid USDA forecasts of higher-than-expected crop yields.

With Agco dropping 2.6 percent to $70.59 per share during trading hours Thursday, Deere falling 2.4 percent to $129.27, and CNH Industrial slipping 1.5 percent to $11.59, farm-machinery manufacturers seem to be struggling to revive demand for equipment.

All crop yields except corn have collectively increased since 2016, according to a USDA report Thursday. While corn production dropped 7 percent from 2016, soybean production rose 2 percent, cotton production 20 percent, and winter wheat production 1 percent higher than its July forecast.

With elevated crop surpluses decreasing farmer purchasing power, machinery sales in North America have fallen in the past three years, according to The Wall Street Journal.