CNH Industrial, the tractor and truck-making sister company of Fiat Chrysler Automobiles, reported a sharp drop in fourth-quarter sales as falling crop prices hurt demand for agricultural equipment.

The UK-based conglomerate said group sales fell 10 per cent to $8.4bn in the three months to December 31, compared to the same period last year — reflecting how farmers reined in spending on new machinery.

CNH is the latest agricultural equipment manufacturer to be squeezed by falling commodities, with global grain prices tumbling from their 2012 highs as bumper harvests fuel a supply glut. Deere & Co and Agco, the US company that owns Massey Ferguson, have both described difficult trading conditions last year.

Farmers invested heavily in new machinery during the boom years at the start of the decade, and so have young fleets that require little investment, said Lawrence De Maria, analyst at William Blair, an investment bank.

“Agriculture is heading for a hard landing and could take years to recover,” added Mr Blair, saying that “lower crop prices, higher costs and years of a boom cycle that have now sharply reversed course” means that “all regions of the world are looking to be weaker in 2015”.

CNH’s agricultural equipment sales fell 17.8 per cent to $3.4bn in the fourth quarter, and declined 9.8 per cent to $15.2bn in the full year.

CNH is expecting group industrial sales — which exclude financial services — of $28bn in 2015, down 12.5 per cent compared to last year, partly because it anticipates “challenging trading conditions” in sections of the agricultural industry.

“We’re going to have to take production down quite a bit to level the inventories,” said Richard Tobin, chief executive, adding he expected to cut capital expenditure in 2015.

Shares in CNH, which was created in 2012 by the merger of Fiat Industrial and CNH Global, have fallen 31 per cent in the past year.