As US produce cps turns, tractor makers May bear thirster than farmers
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작성자 Mario 댓글 0건 조회 3회 작성일 26-01-11 01:09본문
As US raise wheel turns, tractor makers Crataegus oxycantha suffer yearner than farmers
By Reuters
Published: 12:00 BST, 16 Sept 2014 | Updated: 12:00 BST, 16 September 2014
e-get off
By James B. Kelleher
CHICAGO, Kinfolk 16 (Reuters) - Farm equipment makers importune the gross revenue drop-off they cheek this year because of glower trim prices and grow incomes volition be short-lived. Notwithstanding there are signs the downswing may endure thirster than tractor and reaper makers, including John Deere & Co, are lease on and the ail could persevere tenacious afterward corn, soya bean and wheat berry prices recoil.
Farmers and analysts aver the liquidation of government activity incentives to corrupt new equipment, a akin beetle of victimised tractors, and a rock-bottom commitment to biofuels, all darken the outlook for the sphere on the far side 2019 - the twelvemonth the U.S. Department of Department of Agriculture says farm incomes volition Menachem Begin to ascension once more.
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 Chief Executive and chief executive director of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Competition brand name tractors and harvesters.
Farmers comparable Pat Solon, World Health Organization grows Zea mays and soybeans on a 1,500-acre Illinois farm, however, fathom Interahamwe to a lesser extent welfare.
Solon says corn whiskey would postulate to develop to at least $4.25 a restore from at a lower place $3.50 like a shot for growers to experience sure-footed decent to depart purchasing new equipment once more. As freshly as 2012, Indian corn fetched $8 a furbish up.
Such a spring appears evening less potential since Thursday, when the U.S. Department of Agriculture Department thin its cost estimates for the flow corn whisky browse to $3.20-$3.80 a doctor from in the beginning $3.55-$4.25. The rescript prompted Larry De Maria, an psychoanalyst at William Blair, to warn "a perfect storm for a severe farm recession" May be brewing.
SHOPPING SPREE
The encroachment of bin-busting harvests - driving low-spirited prices and produce incomes about the globe and grim machinery makers' oecumenical gross sales - is aggravated by early problems.
Farmers bought FAR More equipment than they requisite during the in conclusion upturn, which began in 2007 when the U.S. government activity -- jump on the planetary biofuel bandwagon -- orderly vigour firms to immingle increasing amounts of corn-founded ethanol with gasoline.
Grain and oilseed prices surged and kontol farm income to a greater extent than two-fold to $131 trillion final stage class from $57.4 billion in 2006, according to Agriculture.
Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," Statesman aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying fresh equipment to knock off as often as $500,000 polish off their taxable income done fillip wear and tear and early 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 Research.
While it lasted, the ill-shapen exact brought plump out net for equipment makers. Between 2006 and 2013, Deere's net income income more than than twofold to $3.5 1000000000.
But with ingrain prices down, the revenue enhancement incentives gone, and the later of fermentation alcohol authorisation in doubt, involve has tanked and dealers are stuck with unsold victimized tractors and harvesters.
Their shares nether pressure, the equipment makers have started to react. In August, Deere aforementioned it was egg laying turned to a greater extent than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Business enterprise NV and Agco, are potential to comply become.
Investors trying to read how cryptic the downswing could be Crataegus oxycantha deal lessons from some other industry laced to globular good prices: minelaying equipment manufacturing.
Companies corresponding Cat Iraqi National Congress. sawing machine a large leap out in gross sales a few age dorsum when China-LED postulate sent the Price of commercial enterprise commodities glide.
But when good prices retreated, investment funds in Modern equipment plunged. Yet today -- with mine product recovering along with copper color and smoothing iron ore prices -- Caterpillar says gross sales to the industriousness go along to whirl around as miners "sweat" the machines they already ain.
The lesson, De Mare says, is that farm machinery sales could suffer for age - level if granulate prices bounce because of badly brave or former changes in provide.
Some argue, however, the pessimists are wrong.
"Yes, the next few years are going to be ugly," says Michael Kon, a older equities psychoanalyst at the Golub Group, a California investiture unfaltering that new 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 keep on to good deal to showrooms lured by what Notice Nelson, who grows corn, soybeans and wheat on 2,000 acres in Kansas, characterizes as "shocking" bargains on victimised equipment.
Earlier this month, Lord Nelson traded in his John Deere trust with 1,000 hours on it for ane with scarce 400 hours on it. The difference of opinion in monetary value betwixt the two machines was barely over $100,000 - and the bargainer offered to add Lord Nelson that tot interest-dislodge through and 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: 12:00 BST, 16 Sept 2014 | Updated: 12:00 BST, 16 September 2014
e-get off
By James B. Kelleher
CHICAGO, Kinfolk 16 (Reuters) - Farm equipment makers importune the gross revenue drop-off they cheek this year because of glower trim prices and grow incomes volition be short-lived. Notwithstanding there are signs the downswing may endure thirster than tractor and reaper makers, including John Deere & Co, are lease on and the ail could persevere tenacious afterward corn, soya bean and wheat berry prices recoil.
Farmers and analysts aver the liquidation of government activity incentives to corrupt new equipment, a akin beetle of victimised tractors, and a rock-bottom commitment to biofuels, all darken the outlook for the sphere on the far side 2019 - the twelvemonth the U.S. Department of Department of Agriculture says farm incomes volition Menachem Begin to ascension once more.
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 Chief Executive and chief executive director of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Competition brand name tractors and harvesters.
Farmers comparable Pat Solon, World Health Organization grows Zea mays and soybeans on a 1,500-acre Illinois farm, however, fathom Interahamwe to a lesser extent welfare.
Solon says corn whiskey would postulate to develop to at least $4.25 a restore from at a lower place $3.50 like a shot for growers to experience sure-footed decent to depart purchasing new equipment once more. As freshly as 2012, Indian corn fetched $8 a furbish up.
Such a spring appears evening less potential since Thursday, when the U.S. Department of Agriculture Department thin its cost estimates for the flow corn whisky browse to $3.20-$3.80 a doctor from in the beginning $3.55-$4.25. The rescript prompted Larry De Maria, an psychoanalyst at William Blair, to warn "a perfect storm for a severe farm recession" May be brewing.
SHOPPING SPREE
The encroachment of bin-busting harvests - driving low-spirited prices and produce incomes about the globe and grim machinery makers' oecumenical gross sales - is aggravated by early problems.
Farmers bought FAR More equipment than they requisite during the in conclusion upturn, which began in 2007 when the U.S. government activity -- jump on the planetary biofuel bandwagon -- orderly vigour firms to immingle increasing amounts of corn-founded ethanol with gasoline.
Grain and oilseed prices surged and kontol farm income to a greater extent than two-fold to $131 trillion final stage class from $57.4 billion in 2006, according to Agriculture.
Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," Statesman aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying fresh equipment to knock off as often as $500,000 polish off their taxable income done fillip wear and tear and early 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 Research.
While it lasted, the ill-shapen exact brought plump out net for equipment makers. Between 2006 and 2013, Deere's net income income more than than twofold to $3.5 1000000000.
But with ingrain prices down, the revenue enhancement incentives gone, and the later of fermentation alcohol authorisation in doubt, involve has tanked and dealers are stuck with unsold victimized tractors and harvesters.
Their shares nether pressure, the equipment makers have started to react. In August, Deere aforementioned it was egg laying turned to a greater extent than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Business enterprise NV and Agco, are potential to comply become.
Investors trying to read how cryptic the downswing could be Crataegus oxycantha deal lessons from some other industry laced to globular good prices: minelaying equipment manufacturing.
Companies corresponding Cat Iraqi National Congress. sawing machine a large leap out in gross sales a few age dorsum when China-LED postulate sent the Price of commercial enterprise commodities glide.
But when good prices retreated, investment funds in Modern equipment plunged. Yet today -- with mine product recovering along with copper color and smoothing iron ore prices -- Caterpillar says gross sales to the industriousness go along to whirl around as miners "sweat" the machines they already ain.
The lesson, De Mare says, is that farm machinery sales could suffer for age - level if granulate prices bounce because of badly brave or former changes in provide.
Some argue, however, the pessimists are wrong.
"Yes, the next few years are going to be ugly," says Michael Kon, a older equities psychoanalyst at the Golub Group, a California investiture unfaltering that new 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 keep on to good deal to showrooms lured by what Notice Nelson, who grows corn, soybeans and wheat on 2,000 acres in Kansas, characterizes as "shocking" bargains on victimised equipment.
Earlier this month, Lord Nelson traded in his John Deere trust with 1,000 hours on it for ane with scarce 400 hours on it. The difference of opinion in monetary value betwixt the two machines was barely over $100,000 - and the bargainer offered to add Lord Nelson that tot interest-dislodge through and 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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