Today, John Deere reported second quarter financial results and the story was a good one, with market conditions showing signs of further stabilization. On an overall basis, we are seeing modestly higher demand for our products, with the agricultural sector in South America staging a strong recovery. At the same time, our performance reflects the actions we have taken to expand our customer base and operate more efficiently. We're benefitting from the sound execution of our operating plans, the strength of our broad product portfolio and the steps we've taken to bring down structural cost. As a result of all these factors, we have raised our forecast and are now calling for significantly higher earnings for the full year.
Now let's take a closer look at our second quarter results, beginning on Slide 3. Net sales and revenues were up 5% to $8.287 billion. Net income attributable to Deere & Company was $802 million. EPS was $2.49 in the quarter. On Slide 4, total worldwide Equipment Operations net sales were up 2% to $7.26 billion.
Price realization in the quarter was positive by 2 points. Currency translation did not have a material impact in the quarter.
Turning to a review of our individual businesses, let's start with Agriculture & Turf on Slide 5. Net sales were up 1% in the quarter-over-quarter comparison, primarily due to price realization. Operating profit was $1.003 billion, up from 614 million last year, a result of more favorable sales mix, price realization and the favorable effects of currency exchange.
The quarter also benefited from a gain on the sale of a partial interest in SiteOne Landscape Supply, Inc., which contributed about 3 points of operating margin. For more details regarding the transaction, please see the notes in today's earnings release. Operating margins were 17.3% for the quarter. Excluding the SiteOne impact, operating margins were about 3.5 points higher than last year's second quarter. Before we review the industry sales outlook, let's look at fundamentals affecting the ag business.
Slide 6 outlines U.S. farm cash receipts. Following a forecasted about 5% reduction in 2016 cash receipts, we expect 2017 total cash receipts plus government payments to be about $367 billion. This is roughly flat with 2016 as declines in meat animals and food grains cash receipts mostly offset gains in dairy and cotton cash receipts. On Slide 7, record soybean and corn production from South America is expected in 2016-2017. Global grain and oilseeds stocks-to-use ratios are forecast to remain at elevated but generally unchanged levels in 2016-2017 as abundant crops are mostly offset by strong demand around the world. Chinese grain stocks continued to increase in 2016 with supply, domestic production plus imports, outpacing demand. Chinese stocks of grains now represent almost half of the world's stock. Remember, these Chinese stocks are unlikely to be exported. That means the world market remains sensitive to major production setbacks, geopolitical disruptions or trade disputes. Our economic outlook for the EU28 is on Slide 8. Economic growth in the region is improving, though geopolitical risks remain elevated. Variable farm income remains below the long-term average due to high global grain stocks and last year's core harvest. However, conditions appear to be bottoming out in 2017. The dairy market is recovering with prices at normal levels and forecast for margins moving above the five-year average. Meanwhile, sentiment for dairy farmers is improving and remains positive for beef and pork producers. Note that nearly half of EU farm incomes are derived from dairy and livestock. Shifting to Brazil on Slide 9, the chart on the left displays the crop value of agricultural production, a good proxy for health of agri business in Brazil. Ag production is expected to increase about 9% in 2017 in U.S. dollar terms due to record acreage expansion and yield expectations. In local currency, the value of production is forecast to be up about 1%. Brazilian farmers, since they sell their crops in U.S. dollars, remain solidly profitable. On the right side of the slide, you will see eligible rates for ag-related government sponsored finance programs. Rate for Moderfrota remain at 8.5% for small and midsize farmers and 10.5% for large farmers. Importantly, the overall budget for Moderfrota has been raised again by about R$1 billion to R$8.55 billion in total. This demonstrates the government's ongoing commitment to agriculture and continues to improve farmer confidence. Despite the current political uncertainty, news on the 2017-2018 harvest plan is still anticipated in the coming weeks for the budget year that begins in July.
Our 2017 Ag & Turf industry outlooks are summarized on Slide 10. Industry sales in the U.S. and Canada are now forecast to be down about 5%, with a slight improvement in both large and small models of equipment. As noted previously, it does appear the large ag market is stabilizing. Signs supporting the stabilization include a considerably lower rate of industry sales decline in 2017 versus the past two years and a used equipment environment that is more supportive of sales. The EU industry outlook is now flat to down 5% in 2017. While there is improved sentiment in the region due to higher dairy and livestock margins, low crop prices and farm incomes as well as geopolitical risks continue to weigh on the market. In South America, industry sales of tractors and combines are projected to be up about 20% in 2017. Positive industry sentiment in Brazil and Argentina continue to drive this improvement. Shifting to Asia, sales are expected to be flat to up slightly, with growth in India being the main driver.
Turning to another product category, industry retail sales of turf and utility equipment in U.S. and Canada are projected to be roughly flat in 2017. Putting this all together, on Slide 11, fiscal year 2017 Deere sales of worldwide Ag & Turf equipment are now forecast to be up about 8% versus 2016, driven largely by growth in our overseas markets. Our Ag & Turf division operating margin is forecast to be about 11.5% in 2017. The implied incremental margin for the year is about 43%, or around 35% without the impact of SiteOne and the voluntary employee separation program. In comparison with last quarter's forecast, the changes driven by sales improvements in all of our main geographies, including large ag in North America, and results in about 45% incremental margin net of the SiteOne impact. Now let's focus on Construction & Forestry on Slide 12.
Net sales were up 7% in the quarter as a result of higher shipment volumes and price realization, partially offset by higher warranty costs. Operating profit was $108 million for the quarter, up from $74 million last year. The increase was driven by higher shipment volumes and price realization. These factors were partially offset by higher warranty costs and a less favorable sales mix. Operating margins were 7.4% in the quarter, about 2 points higher than last year's second quarter. The division's incremental margin was about 35%.
Moving to Slide 13, the economic fundamentals affecting the Construction & Forestry industries in North America are cause for optimism. GDP growth is positive, job growth continues, construction spending is up from 2016 levels, and housing starts are expected to exceed 1.25 million units this year. Construction investment was up in the first quarter of 2017 by almost 10%, led by rebounding oil and gas and residential activities. Commercial and institutional construction activity continued to increase moderately. Machinery rental utilization rates have improved after two years of deterioration and used inventory has come down in the past quarter. All in all, our outlook reflects a strong order book as well as what we've seen in the way of retail sales growth over the last three months.
Moving to the C&F outlook on Slide 14, Deere's Construction & Forestry sales are now forecast to be up about 13% in 2017 with no material currency impact. The forecast for global forestry markets is down about 5%, a result of lower sales in U.S. and Canada. C&F's full-year operating margin is now projected to be about 6%, with an implied incremental margin of about 24%.
Let's move now to our Financial Services operations. Slide 15 shows the provision for credit losses as a percent of the average owned portfolio. At the end of April, the annualized provision for credit losses was 18 basis points, reflecting the continued excellent quality of our portfolios. The financial forecast for 2017 shown on the slide contemplates a loss provision of about 28 basis points, slightly lower than the previous forecast. This will put losses just above the 10-year average of 26 basis points and below the 15-year average of 34 points.
Moving to Slide 16, worldwide Financial Services net income attributable to Deere & Company was $103.5 million in the second quarter versus $102.6 million last year. The improvement was primarily due to lower operating lease losses and impairments, largely offset by less favorable financing spreads and higher SA&G. Financial Services 2017 net income attributable to Deere & Company is now forecast to be about $475 million, down slightly from our previous forecast due to higher SA&G, mainly for incentive compensation. Slide 17 outlines receivables and inventories. For the Company as a whole, receivables and inventories ended the quarter down $363 million due to reductions in the Ag & Turf division. We expect to end 2017 with total receivables and inventories up about $400 million, with increases in both the Ag & Turf and C&F divisions.
The increases are consistent with higher sales in both divisions. Slide 18 shows cost of sales as a percent of net sales. Cost of sales for the second quarter was 75%. Our 2017 cost of sales guidance is about 77% of net sales, an improvement of about 1 point from last quarter. When modeling 2017, keep in mind the unfavorable impacts of emissions cost, voluntary separation expenses, incentive compensation and raw material prices. On the favorable side, we expect price realization of about 1 point, savings related to the voluntary employee separation program, and a favorable sales mix. Now let's look at some additional details. With respect to R&D expense on Slide 19, R&D was down 6% in the second quarter. Our 2017 forecast calls for R&D to be down about 1%.
Moving to Slide 20, SA&G expense for the Equipment Operations was up 8% in the second quarter, with the main drivers being incentive compensation and commissions paid to dealers. Our 2017 forecast calls for SA&G expense to be up by about 7%. Roughly two-thirds of the full-year change is expected to come from incentive compensation, voluntary separation expenses and commissions paid to dealers.
Turning to Slide 21, the Equipment Operations tax rate was 31% in the quarter. For 2017, the full-year effective tax rate forecast is now in the range of 32% to 34%.
Slide 22 shows our Equipment Operations history of strong cash flow. Cash flow from the Equipment Operations is now forecast to be about $3.1 billion in 2017.
The Company's financial outlook is on Slide 23. Net sales for the third quarter are forecast to be up about 18% compared to 2016. Our full year outlook now calls for net sales to be up about 9%, which includes about 1 point of price realization. Finally, our full-year 2017 net income forecast is now about $2 billion. In closing, with this recent performance, John Deere has demonstrated a continued ability to produce impressive results through all phases of the business cycle.
This kind of resilience illustrates our success, finding ways to operate more efficiently and develop a wider range of revenue sources. It shows something else too. The impact of the consistent investments we've made in advanced technology, new products and additional markets. Actions such as these are leading to strong performance in 2017. What's more, they support our conviction that John Deere is well-positioned to deliver significant value to our customers and investors over the long-term.