Aug. 29--Deere & Co. is ramping up production of its largest tractors in Waterloo.

The Moline, Ill.-based farm equipment manufacturer on Thursday said it will spend $180 million on plant expansions in Waterloo and Brazil to meet rising global demand for its tractors and other farm machinery.

Deere said it will invest $97 million to expand high-horsepower tractor manufacturing capacity by about 40 percent in Waterloo. The equipment is exported to more than 130 countries.

About 103,000 square feet will be added to Deere's drive train operation and improvements will be made to the company's foundry, engine and drive train operations.

Part of the investment will be used for improvements at a plant in Coffeyville, Kan., where transmissions and other drive train components are built.

Thursday's announcement was the second piece of good news this year for workers at the Waterloo plant.

Deere in February announced plans to invest nearly $90 million to increase manufacturing capacity at Waterloo. The two projects are expected to be completed by early 2010.

"John Deere is investing to help ensure that we have the manufacturing capacity to meet this demand," said David Everitt, president of the company's agricultural division in North America, Australia and Asia, and global tractor sourcing.

The expansions come amid high prices for crops driven by rising wealth in nations like China and India that has lifted food demand, as well as extreme weather that has reduced yields around the globe. Although grain prices have slipped recently, they are still higher than they were two years ago.

The U.S. Department of Agriculture reported this month that farmers are on pace to produce the second largest corn crop and fourth largest soybean crop in history. The USDA said favorable weather conditions in Iowa have helped corn and soybean crops recover from late planting, but there are still concerns about an early killing frost, as crop maturation is about two weeks behind when compared with a normal year.

Deere said it plans to invest about $80 million in agricultural manufacturing and parts distribution operations in Brazil. The company said the investments were being made in its combine and planter factory in Horizontina, its tractor factory in Montenegro and for the development of a new parts distribution center in Campinas.

"South America is an important market for John Deere," said Mark von Pentz, president of the agricultural division for Europe, Africa and South America and global harvesting equipment sourcing. "These investments will assist Deere as we continue to enhance our market position in this important region." Deere stock rose $3.05, or 4.49 percent, Thursday to close at $71.01 per share on the New York Stock Exchange.

-- Contact the writer: (319) 398-8366 or george.ford@gazcomm.com

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