Deere & Co , the world's largest farm equipment maker, said on Thursday it would lay off 367 workers at its primary harvester factory in East Moline, Illinois, and idle most of the plant's other employees for a month because of reduced demand for combines.

Deere said in a statement that the layoffs would be for an indefinite time and would take place later this month.

Layoffs at Deere have affected more 1,000 of the company's hourly workers, including the 367, in Davenport, Dubuque, Des Moines and Ottumwa, Iowa, and East Moline, Illinois.

About 800 salaried workers left the company this year under a voluntary program.

The farm sector had been largely insulated in 2008 from the economic downturn, but as commodity prices and demand for equipment declined, it has taken a toll on businesses and their workers.

A key factor has been a retreat in commodity prices from last year's record levels, which will translate into sharply lower farm income this year and next, according to the U.S. Department of Agriculture.

Since sales of tractors, harvesters and other agricultural equipment rise and fall along with farm income, Deere and competitors CNH Global NV and Agco Corp have been scaling back production.

(Reporting by James B. Kelleher; Editing by Toni Reinhold)