Today, John Deere announced its fourth quarter financial results in the end to another successful year. In fact, sales and earnings for 2017 were the fifth highest in the company history. Our performance was helped by improving markets for farm and construction equipment and also by our ongoing success established in a broad based product portfolio in a flexible cost structure. As a result, Deere has remained well positioned not only to serve its present customers but also to make investments needed to drive growth and attract even more customers in the future. Now, let's take a closer look at the fourth quarter in detail beginning on slide four. Net sales and revenues were up 23% to just over $8 billion, net income attributable to Deere & Company was $510 million, EPS was $1.57 in the quarter. On slide five, total worldwide equipment operations net sales were up 26% to about $7.1 billion. Price utilization in the quarter was positive by one point. Currency translation was positive by two points. Turning to a review of our individual businesses, let's start with Ag & Turf on slide six.
Net sales were up 22% in the quarter-over-quarter comparison, all of the regions of the world were higher in the quarter, the increase was led by the US and EU 28. Operating profit was $584 million, up 57% versus the fourth quarter of 2016. The increase in operating profit was primarily driven by higher shipment volumes and favorable sales mix partially offset by higher production cost and higher selling administrative and general expenses. Operating margins were 10.7% in the quarter. Incremental margins were about 47% for the full year, excluding the impact of items such as the Site One gains and voluntary separation program expenses incremental margins were about 33%. Before we review the industry sales outlook, let's look at some fundamentals affecting the Ag business.
On slide seven, despite increasing global demand, global grain and oil seeds stock to use ratios are forecast to remain at elevated but generally unchanged levels in 2017, 2018 as an abundant crop are mostly offset by strong demand around the world. Chinese green and oil seeds stock remain high heading into 2018, after more than 10 years of supply which includes domestic production plus imports outpacing demand. Chinese grains still represent almost half of the world stock and considering that these stocks are unlikely to be exported the world market remains sensitive to production setbacks or major geopolitical disruptions. The world cotton stocks-to-use ratio has now fallen for second consecutive season and to the lowest level in five seasons reflecting stronger global demand.
Slide 8 outlines US farm cash receipts. 2017 cash receipts are estimated to be 377 billion, about 3% higher than 2016's levels. Given the large crop harvest in 2017 and consequently the lower commodity prices we are seeing today, we expect 2018 total cash receipts to be approximately 368 billion. That's down about 2% from 2017 due to lower livestock and crop cash receipts. Our economic outlook for the EU 28 is on slide 9. GDP growth in the region is improving though risks remain. Arable farm margins are below the long-term average while the dairy market is recovering with prices holding at above average levels and forecast for margins exceeding the five-year average. Sentiment remains positive for beef and pork producers though downward pressure on pork prices is possible.
Shifting to Brazil on slide 10. The chart on the left displays the crop value of agricultural production a good proxy for the health of agri business in Brazil. Ag production is expected to decrease about 4% in 2018 in US dollar terms due mainly to record production 2017 and the reversion to trend yields in 2018. In local currency the value of production is forecasted to be down about 2%. Although forecast to be lower in 2018, ag margins in Brazil are coming off of a record year and continued acreage expansion is expected. On the right side of the slide you see the eligible rates for ag related government sponsored finance programs. Rates for moderfrota remain at 7.5% for small and mid-sized farmers and 10.5% for large farmers. This demonstrates the government's ongoing commitment to agriculture. Our 2018 ag and turf industry outlooks are summarized on slide 11. Industry sales in the US and Canada are forecasted to be up 5% to 10% for the year. Despite current commodities prices the industry is experiencing stronger replacement demand for large equipment while demand for small equipment remains solid. Deere is experiencing strong order activity in both our early order programs for seasonal products and our order book for large tractors which are supportive of the outlook. The EU 28 industry outlook is forecast to be up about 5% in 2018 a result of margin recovery in dairy and livestock as well as improved harvest outlooks in key markets such as France and the UK. In South America, industry sales of tractors and combines are projected to be flat to up 5% in 2018. This is driven mainly by demand in Argentina which continues to benefit from favorable policy effects, strong fundamentals and pent-up demand. Shifting to Asia, sales are expected to be relatively unchanged from 2017.
Turning to another product category, industry retail sales of turf and utility equipment in the US and Canada are projected to be roughly flat in 2018 though Deere expects to outpace the industry. Putting this all together on slide 12, fiscal year 2018 Deere sales of worldwide ag and turf equipment are forecasted to be up about 9% including about 2 points of positive currency translation. The sales increase is led by the US market and to a lesser extent by the EU 28. The increase in the US is due in part to significant growth in the sale of small ag and turf products which are expected to benefit from new product introductions in the year. The ag and turf division operating margin forecast is about 12.5% in 2018 Excluding the impact of special items, the implied incremental margin in 2018 are nearly 35%. Furthermore, excluding the impact of currency translation and negative mix, forecasted incremental margins are above 40%.
Now let's focus on Construction & Forestry on slide 13. Net sales were up 37% in the quarter due to higher shipment volumes, price realization and the favorable effects of currency translation. Operating profit was $85 million due to higher shipment volumes and price realization partially offset by an impairment charge for international operations. Operating margin was 5% in the quarter, but 7.5% excluding the impairment charge. Moving to slide 14.
The economic fundamentals affecting the Construction & Forestry Industries in North America continue to be supportive of increased industry demand. GDP growth is forecasted to be strong continuing a positive trend experienced during the past six months in the US and Canada. Housing demand is growing, but constrained by supply, as a result single family home inventories continue at 35-year lows. Single family housing starts are strong across all regions in the US. Single family homes require increased earthmoving and lumber content which are important drivers of earthmoving and Forestry equipment. Construction investment is forecast to grow in 2018 led by oil and gas and residential activity. Oil prices are forecasted to be above $50 which is important since oil and gas related activity tends to slow when oil prices are below $50 and tends to pick up when above that level. In addition, machinery rental utilization rates continue improving and rental pricing is gaining traction. Finally, new and used inventory levels have come down and auction activity has declined substantially year-over-year. Deere's outlook also reflects a strong order book based on industry activity and positive trend in retail sales.
Moving to the C&F outlook on slide 15. Deere's construction Forestry sales are now forecasted to be up about 69% in 2018 mainly driven by the anticipated acquisition of Wirtgen as well as by strong demand in US and Canada. The forecast includes about $3.1 billion in sales from Wirtgen and assume the acquisition will close in December. Regarding the Forestry the forecast for global forestry market is flat to up 5%, a result of improvement in the US and Canada. C&F's full year operating margin is projected to be about 8% which includes estimated purchase accounting and transaction cost for Wirtgen. Excluding Wirtgen, the division's annual operating margin is forecast to be about 10.5%. Let's move now to our financial services operations.
Slide 16, shows the provision for credit losses as a percent of the average owned portfolio. The provision at the end of 2017 was 24 basis points, reflecting the continued excellent quality of our portfolios. The financial forecast for 2018 shown on the slide, contemplates a loss provision of about 25 basis points. This will put losses at the 10-year average of 25 basis points and slightly below the 15-year average of 27.
Moving to slide 17. Worldwide financial services net income attributable to Deere & Company was $128 million in the fourth quarter versus $110 million last year. For the full year, financial services net income attributable to Deere & Company was $477 million versus $468 million in 2016.
The higher results for both periods were primarily due to lower losses on lease residual values. Full year results were partially offset by less favorable financing spreads and higher selling, administrative and general expenses. Financial services is expected to earn about 515 million in 2018. The outlook reflects a higher average portfolio partially offset by higher selling, administrative and general expenses.
Next, we will turn to receivables and inventories as shown on slide 18. For the company as a whole, receivables and inventories ended the year, up $1.477 billion. Ag and turf accounted for about two-thirds of the increase with the majority driven by growth in overseas receivables. 2018 receivables and inventories are expected to rise primarily due to the inclusion of Wirtgen while the rest of the business will likely see movement in line with sales. More specific guidance will be provided with our first quarter 2018 earnings release.
Moving to slide 19, cost of sales as a percent of net sales for 2017 was 77%. Our 2018 guidance for cost of sales as a percent of net sales is about 75%. When modeling 2018, keep these impacts in mind; Positive price realization of about 1 point. On the unfavorable side, we expect an unfavorable product mix, higher overhead spending, and increased incentive compensation. Now, let's look at some additional details. With respect to R&D on slide 20. R&D was up 3% in the fourth quarter but down 2% for the full year. Currency translation had an unfavorable impact of 1% in the quarter and no impact for the full year. Our 2018 forecast calls for R&D to up about 18%, half of which is related to the acquisitions of Wirtgen and Blue River Technology. Moving now to slide 21. S, A&G expense for the equipment operations was up 15% in the fourth quarter with acquisition related activities, commissions paid to dealers, incentive compensation and currency translation accounting for most of the change. S, A&G expense for the full year was up 12% due to the same factors noted for the quarter in addition to voluntary separation program expenses. Our 2018 forecast calls for S, A&G expense to be up about 26%. Excluding acquisition related expenses, S, A&G is forecasted to be up about 2% in 2018. Turning to slide 22.
The equipment operations tax rate was 27% in the quarter and 30% for the full year. For 2018, the effective tax rate is forecasted to be in the range of 31% to 33%. The rate is a result of a more favorable mix of income, improved profitability outside the US, and structural changes within the business.
Slide 23 shows our equipment operations history of strong cash flow. Cash flow from the equipment operations $2.4 billion in 2017. The change versus our previous forecast of about $2.9 billion was due largely to OPEB contributions made earlier than previously anticipated for tax planning purposes. For 2018, cash flow from equipment operations is forecasted to be about $3.8 billion which includes positive cash flow from Wirtgen. The 2018 financial outlook is on slide 24. Net sales for the quarter are forecast to be up about 38% compared to 2018.
This includes about 2 points of price realization and about 3 points of favorable currency translation. Wirtgen is expected to contribute about 6 points to the increase in the quarter. The full year forecast calls for net sales to be up about 22%. Price realization and favorable currency translation are expected to be about 1 point and 2 points respectively. Wirtgen sales are forecasted to contribute about 12 points for the year. Finally, our full year 2018 net income forecast is about $2.6 billion.
Comparing 2017 and 2018, slide 25 shows the high-level reconciliation of operating profit for the equipment operations adjusted for special items. Operating profit was 2.82 billion for the equipment operations in 2017. Included were these special items which require consideration. $275 million pretax gain from sale of remaining interest in Site One landscape supply which has been discussed throughout the year. M&A cost of $37 million, impairment charge of $40 million mentioned earlier and voluntary separation program expenses of $92 million. Adjusted for these factors, 2017 operating profit would have been 2.615 billion.
Looking at 2018, based on the guidance for net sales changes in operating margin by segment, projected operating profit for the equipment operations is forecast to be about 3.525 billion. Included in the operating profit forecast are following items of note: Wirtgen operating profit using very preliminary estimates for purchase accounting and deal cost is expected to be about $75 million resulting in operating margin between 2 and 3%. On a standalone basis, Wirtgen is forecast to deliver operating margin in the range of 15 to 16%. The operating margin expectation for the business going forward is in the 11 to 12% range reflecting estimated ongoing purchase accounting related expenses. The 2018 forecast does not include any benefit from synergies associated with the Wirtgen acquisitions which as noted at the time of announcement are expected to total €100 million by 2022. Additionally, the acquisition of Blue River technology results in higher year-over-year spending of roughly $60 million as we invest in machine learning and integrated technology into our portfolio. Taking these items into account, adjusted operating profit for 2018 is expected to be about 3.51 billion. On an adjusted basis, the comparison shows an improvement of roughly 900 million in operating profit for 2018 versus 2017, representing an incremental margin of about 33%. As a result, Deere is demonstrating improved operational performance due to disciplined cost execution, cost management and continued investment in innovative technology and solutions. This brings benefits to stakeholders in 2018 and beyond. I'll now turn the call over to Raj Kalathur for closing comments.