Although the overall corporate business is up, the irrigation unit is their main agricultural market and the picture wasn’t too rosy, although the company remains positive for the future.
In the Irrigation Segment, second quarter sales were $65.4 million, a 25% decrease from last year’s record second quarter results. Operating income for the segment declined 37% to $7.5 million due to lower volumes and reduced factory utilization. Cost cutting measures were taken during the quarter. In North America, demand fell substantially due to lower crop prices and inflation in energy and fertilizer costs for growers. Many farmers use large amounts of diesel fuel and prices have risen to record high levels. Certain crop fertilizers are produced as a by-product in the production of natural gas, where prices are also fluctuating in tandem with crude oil. In international markets, sales levels increased in the smaller markets while declining in major international markets largely due to lower world crop prices and increased energy costs. Valmont believes the long-term economic and water saving benefits of mechanized irrigation continue to be compelling.
For more information contact Jeff Laudin +1-402-963-1158.