Farm equipment giant John Deere announced Wednesday that its first quarter profits were much higher than expected as high food costs contributed to rising farm income and spurred farmers to invest in new machinery like tractors and planters.

Corn, wheat and soybeans are also rising in value and have helped U.S. farmers to reap hefty profits during the past year. Farmers are increasingly investing in new farm equipment as they look to expand their operations to keep up with burgeoning demand for their goods. Moreover, rising inflation since the beginning of this year has pushed John Deere to raise its outlook for 2011.

Oliver Pursche, the president of Gary Goldberg Financial Services, told Reuters that Deere "continues to do a great job at innovating and coming out with new products that are going to position them in Latin America, Asia and emerging markets." Deere has done "a great job at improving efficiencies and margins, not just through cost-cutting," he affirmed.

Deere earned $514 million in the first quarter ended January 31 - up from $243.2 million the year prior; sales also jumped 27 percent to $6.12 billion as machinery sales in the U.S. and Canada surged.