What's going on?

Deere & Co. � the world�s biggest agricultural equipment maker � gave a disappointing quarterly results update on Friday.

What does this mean?

Crop prices have been booming in the first half of the year, with corn and soybeans hitting 10-year highs and leaving farmers flush with cash. And what else would they spend it on but Deere�s machinery, which � along with higher prices � helped push up the company�s sales by a better-than-expected 22% last quarter from the same time in 2021.

That�s all well and good, but it still wasn�t enough to offset the higher prices of raw materials and parts, which drove up costs and dragged down profit. In fact, Deere cut its profit outlook for the rest of the year, warning that these issues aren�t going anywhere soon. The firm reaped what it sowed: investors sent its shares down 7%.

Why should I care?

The bigger picture: It�s a good day for America.
Deere is worth watching because it�s an economic bellwether, meaning its performance gives an insight into the wider US economy. So the fact that it said it was feeling upbeat about demand in its next financial year � largely thanks to the popularity of its early-order program � could be a sign that things aren�t as bad as they seem. Add in the recent demand for US oil and encouraging retail sales, and some economists think the country might be set to escape its �technical recession� � that is, two consecutive quarters or more of economic shrinkage � as soon as this quarter.

Zooming out: Ukraine keeps feeding the world.
One of the main reasons crop prices are so high is because the Russian invasion interrupted shipments out of Ukraine, one of the world�s so-called �breadbaskets�. But things are gradually getting back up and running: more than 500,000 tons of crops were shipped out of the country in the first half of the month, which is already helping push down global food prices.