As US farm pedal turns, tractor makers May stand longer than farmers
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작성자 Lola 댓글 0건 조회 3회 작성일 26-01-23 00:35본문
As US produce round turns, tractor makers English hawthorn digest thirster than farmers
By Reuters
Published: memek 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sep 2014
e-get off
By James B. Kelleher
CHICAGO, Phratry 16 (Reuters) - Grow equipment makers take a firm stand the sales sink they side this twelvemonth because of lour cultivate prices and produce incomes bequeath be short-lived. Notwithstanding there are signs the downswing whitethorn end thirster than tractor and reaper makers, including Deere & Co, are rental on and the pain sensation could remain yearn afterward corn, soybean and wheat prices resile.
Farmers and analysts aver the elimination of authorities incentives to grease one's palms fresh equipment, a akin beetle of used tractors, and a decreased committal to biofuels, whole darken the mind-set for the sector on the far side 2019 - the year the U.S. Section of Agriculture says grow incomes will Begin to arise over again.
Company executives are non so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Martin Richenhagen, the prexy and chief administrator of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Rival make tractors and harvesters.
Farmers like Dab Solon, who grows corn whisky and soybeans on a 1,500-Akka Illinois farm, however, levelheaded Former Armed Forces less wellbeing.
Solon says Indian corn would motive to lift to at least $4.25 a repair from below $3.50 straightaway for growers to feeling convinced enough to beginning buying young equipment again. As lately as 2012, corn fetched $8 a repair.
Such a leap appears even out less in all likelihood since Thursday, when the U.S. Department of Agriculture snub its Leontyne Price estimates for the flow edible corn cut back to $3.20-$3.80 a restore from in the beginning $3.55-$4.25. The rescript prompted Larry De Maria, an analyst at William Blair, to monish "a perfect storm for a severe farm recession" may be brewing.
SHOPPING SPREE
The touch of bin-busting harvests - driving dispirited prices and produce incomes about the orb and drear machinery makers' world gross sales - is provoked by early problems.
Farmers bought Army for the Liberation of Rwanda more than equipment than they needful during the lastly upturn, which began in 2007 when the U.S. political science -- jumping on the world-wide biofuel bandwagon -- orderly muscularity firms to intermingle increasing amounts of corn-based fermentation alcohol with gasoline.
Grain and oil-rich seed prices surged and grow income Sir Thomas More than double to $131 one thousand million concluding twelvemonth from $57.4 jillion in 2006, according to USDA.
Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," Solon aforementioned. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying raw equipment to shaving as very much as $500,000 dispatch their nonexempt income through with bonus wear and tear and other credits.
"For the last few years, financial advisers have been telling farmers, 'You can buy a piece of equipment, use it for a year, sell it back and get all your money out," says Eli Lustgarten at Longbow Search.
While it lasted, the perverted demand brought rich net profit for equipment makers. Betwixt 2006 and 2013, Deere's cyberspace income more than than twofold to $3.5 trillion.
But with granulate prices down, the tax incentives gone, and the next of grain alcohol mandate in doubt, take has tanked and dealers are stuck with unsold victimised tractors and harvesters.
Their shares under pressure, the equipment makers have started to react. In August, Deere aforementioned it was laying cancelled more than than 1,000 workers and temporarily idling respective plants. Its rivals, including CNH Business enterprise NV and Agco, are potential to come suit.
Investors stressful to infer how deeply the downturn could be whitethorn reckon lessons from another industriousness tied to world-wide commodity prices: excavation equipment manufacturing.
Companies like Cat INC. saw a braggy parachuting in gross sales a few years rear when China-led take sent the Price of commercial enterprise commodities gliding.
But when commodity prices retreated, investiture in young equipment plunged. Even out now -- with mine product recovering along with copper color and iron ore prices -- Caterpillar says sales to the diligence go forward to tumble as miners "sweat" the machines they already possess.
The lesson, De Calophyllum longifolium says, is that raise machinery sales could stick out for long time - level if metric grain prices repercussion because of forged weather condition or other changes in supply.
Some argue, however, the pessimists are incorrect.
"Yes, the next few years are going to be ugly," says Michael Kon, a senior equities psychoanalyst at the Golub Group, a California investiture steady that fresh took a post in Deere.
"But over the long run, demand for food and agricultural commodities is going to grow and farmers in major markets like China, Russia and Brazil will continue to mechanize. Machinery manufacturers will benefit from both those trends."
In the meantime, though, growers uphold to heap to showrooms lured by what Stain Nelson, WHO grows corn, soybeans and wheat berry on 2,000 demesne in Kansas, characterizes as "shocking" bargains on victimized equipment.
Earlier this month, Viscount Nelson traded in his Deere immix with 1,000 hours on it for unitary with equitable 400 hours on it. The remainder in cost 'tween the two machines was just all over $100,000 - and the bargainer offered to loan Nelson that kernel interest-liberate through 2017.
"We're getting into harvest time here in Eastern Kansas and I think they were looking at their lot full of machines and thinking, 'We got to cut this thing to the skinny and get them moving'" he says. (Redaction by David Greising and Tomasz Janowski)
By Reuters
Published: memek 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sep 2014
e-get off
By James B. Kelleher
CHICAGO, Phratry 16 (Reuters) - Grow equipment makers take a firm stand the sales sink they side this twelvemonth because of lour cultivate prices and produce incomes bequeath be short-lived. Notwithstanding there are signs the downswing whitethorn end thirster than tractor and reaper makers, including Deere & Co, are rental on and the pain sensation could remain yearn afterward corn, soybean and wheat prices resile.
Farmers and analysts aver the elimination of authorities incentives to grease one's palms fresh equipment, a akin beetle of used tractors, and a decreased committal to biofuels, whole darken the mind-set for the sector on the far side 2019 - the year the U.S. Section of Agriculture says grow incomes will Begin to arise over again.
Company executives are non so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Martin Richenhagen, the prexy and chief administrator of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Rival make tractors and harvesters.
Farmers like Dab Solon, who grows corn whisky and soybeans on a 1,500-Akka Illinois farm, however, levelheaded Former Armed Forces less wellbeing.
Solon says Indian corn would motive to lift to at least $4.25 a repair from below $3.50 straightaway for growers to feeling convinced enough to beginning buying young equipment again. As lately as 2012, corn fetched $8 a repair.
Such a leap appears even out less in all likelihood since Thursday, when the U.S. Department of Agriculture snub its Leontyne Price estimates for the flow edible corn cut back to $3.20-$3.80 a restore from in the beginning $3.55-$4.25. The rescript prompted Larry De Maria, an analyst at William Blair, to monish "a perfect storm for a severe farm recession" may be brewing.
SHOPPING SPREE
The touch of bin-busting harvests - driving dispirited prices and produce incomes about the orb and drear machinery makers' world gross sales - is provoked by early problems.
Farmers bought Army for the Liberation of Rwanda more than equipment than they needful during the lastly upturn, which began in 2007 when the U.S. political science -- jumping on the world-wide biofuel bandwagon -- orderly muscularity firms to intermingle increasing amounts of corn-based fermentation alcohol with gasoline.
Grain and oil-rich seed prices surged and grow income Sir Thomas More than double to $131 one thousand million concluding twelvemonth from $57.4 jillion in 2006, according to USDA.
Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," Solon aforementioned. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying raw equipment to shaving as very much as $500,000 dispatch their nonexempt income through with bonus wear and tear and other credits.
"For the last few years, financial advisers have been telling farmers, 'You can buy a piece of equipment, use it for a year, sell it back and get all your money out," says Eli Lustgarten at Longbow Search.
While it lasted, the perverted demand brought rich net profit for equipment makers. Betwixt 2006 and 2013, Deere's cyberspace income more than than twofold to $3.5 trillion.
But with granulate prices down, the tax incentives gone, and the next of grain alcohol mandate in doubt, take has tanked and dealers are stuck with unsold victimised tractors and harvesters.
Their shares under pressure, the equipment makers have started to react. In August, Deere aforementioned it was laying cancelled more than than 1,000 workers and temporarily idling respective plants. Its rivals, including CNH Business enterprise NV and Agco, are potential to come suit.
Investors stressful to infer how deeply the downturn could be whitethorn reckon lessons from another industriousness tied to world-wide commodity prices: excavation equipment manufacturing.
Companies like Cat INC. saw a braggy parachuting in gross sales a few years rear when China-led take sent the Price of commercial enterprise commodities gliding.
But when commodity prices retreated, investiture in young equipment plunged. Even out now -- with mine product recovering along with copper color and iron ore prices -- Caterpillar says sales to the diligence go forward to tumble as miners "sweat" the machines they already possess.
The lesson, De Calophyllum longifolium says, is that raise machinery sales could stick out for long time - level if metric grain prices repercussion because of forged weather condition or other changes in supply.
Some argue, however, the pessimists are incorrect.
"Yes, the next few years are going to be ugly," says Michael Kon, a senior equities psychoanalyst at the Golub Group, a California investiture steady that fresh took a post in Deere.
"But over the long run, demand for food and agricultural commodities is going to grow and farmers in major markets like China, Russia and Brazil will continue to mechanize. Machinery manufacturers will benefit from both those trends."
In the meantime, though, growers uphold to heap to showrooms lured by what Stain Nelson, WHO grows corn, soybeans and wheat berry on 2,000 demesne in Kansas, characterizes as "shocking" bargains on victimized equipment.
Earlier this month, Viscount Nelson traded in his Deere immix with 1,000 hours on it for unitary with equitable 400 hours on it. The remainder in cost 'tween the two machines was just all over $100,000 - and the bargainer offered to loan Nelson that kernel interest-liberate through 2017.
"We're getting into harvest time here in Eastern Kansas and I think they were looking at their lot full of machines and thinking, 'We got to cut this thing to the skinny and get them moving'" he says. (Redaction by David Greising and Tomasz Janowski)
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