Agriculture is an essential sector, and Portfolio 21 believes that Deere & Company has an inherent competitive advantage by offering products and services that will be in demand as ecological limits progress against economic growth. Unlike many sectors, agriculture is not cyclical as it is responsible for feeding the world's growing population and contributes to the growing use of biomass for production of alternative fuels. As ecological constraints on economic growth continue to manifest, this sector will be impacted by increasing energy costs and competition for water resources. As a result, Portfolio 21 believes Deere & Company will witness a growing demand for water-conserving drip irrigation, energy efficient products, and products, such as no-till equipment, that decrease soil disturbance and erosion. Deere also recognizes these trends stating that, "it has a role to play in enabling our customers and communities to sustainably and productively exist in a world of finite natural resources."
In an effort to expand the company's presence in the irrigation market, in 2010 Deere opened its latest irrigation equipment manufacturing center in India. Despite these changes in the company's business products and ventures, Portfolio 21 has requested that Deere & Company strengthen its environmental management system to improve the company's manufacturing efficiencies and key performance indicators.
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 9/30/12 and may not reflect current opinions or subsequent events.