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Deere & Co.'s (DE) board named Samuel R. Allen, president of the company's construction and forestry equipment business, to succeed Robert W. Lane as chief executive starting in August.

As part of the transition, Allen, 55, was appointed chief operating officer and president beginning Monday. He also was appointed to the company's board.

Lane will continue to serve as chairman until Allen's expected appointment to that job. A timetable for that move hasn't been set.

Moline, Ill.-based Deere is the world's largest producer of farm machinery by revenue. The moves come at a turbulent time for Deere as lower farm commodity prices and tighter credit have put the brakes on a five-year long boom in farm machinery sales.

Allen will be the ninth chief executive in the company's 172-year history. He has been president of the construction business since 2005.

The collapse of the housing construction industry in the U.S. has steadily eroded sales of Deere's construction equipment since 2007. But the company's tight control over costs and inventories are credited with allowing Deere to avoid the massive employee layoffs and idle plants deployed by competitors Caterpillar Inc. (CAT) and CNH Global N.V. (CNH) in recent months.

Allen started as an engineer with Deere in 1975 and moved through a variety of management posts. Before heading the construction and forestry business, he was responsible for global operations of Deere's power systems group and held senior executive positions with the company's customer finance arm, John Deere Credit, human resources and industrial relations.

Lane, 59, who joined the company in 1982, has been CEO and chairman since August 2000. His departure caught company observers by surprise. But Deere said the move has been under consideration for the past 18 months.

Lane's tenure has been marked by extraordinary growth in revenue and profits in a highly cyclical business. Rising commodity prices in recent years drove up farm incomes, translating into increased demand for Deere's tractors and combines.

Lane's lasting mark on the company, however, will likely be his operational reforms focusing on the relationship between Deere's income and its production costs.

"He's made a lot of important restructuring initiatives that have contributed to their performance over the last few years," said John Kearney, an analyst for Morningstar Inc.

Lane devised a complicated metric for measuring Deere's cost of capital against its pretax operating income that is now applied to all of Deere's business units. The system also is linked to employees' performance bonuses.

Observers expect Allen to continue the system. The company did not make Allen available for comment.

Michael Mack, Deere's chief financial officer, will replace Allen as head of the construction and forestry business. Succeeding Mack as financial officer will be James Field, who has been president of the company's commercial and consumer business. Deere's stock was recently up 7.73% at $46.83 a share.

-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com

(Tess Stynes contributed to this report)