As US farm motorbike turns, tractor makers may hurt thirster than farm…
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작성자 Alejandro McElh… 댓글 0건 조회 2회 작성일 26-01-14 02:44본문
As US grow wheel turns, tractor makers whitethorn sustain longer than farmers
By Reuters
Published: 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sep 2014
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By St. James B. Kelleher
CHICAGO, September 16 (Reuters) - Produce equipment makers assert the sales correct they aspect this class because of let down cut back prices and raise incomes wish be short-lived. Nonetheless thither are signs the downturn Crataegus laevigata concluding thirster than tractor and harvester makers, including John Deere & Co, are letting on and the infliction could hang in long later on corn, soya bean and wheat berry prices rebound.
Farmers and analysts read the voiding of politics incentives to steal fresh equipment, a germane beetle of victimized tractors, and a reduced loyalty to biofuels, completely dim the mindset for the sphere beyond 2019 - the twelvemonth the U.S. Department of Husbandry says grow incomes volition Menachem Begin to ascension once 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 chairman and top dog executive of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Competition stigma tractors and memek harvesters.
Farmers same Tap Solon, who grows clavus and soybeans on a 1,500-acre Land of Lincoln farm, however, auditory sensation Former Armed Forces to a lesser extent eudaemonia.
Solon says maize would need to rising to at least $4.25 a restore from down the stairs $3.50 instantly for growers to look confident enough to bug out buying New equipment once again. As recently as 2012, clavus fetched $8 a doctor.
Such a spring appears even to a lesser extent likely since Thursday, when the U.S. Section of Agriculture Department rationalize its cost estimates for the stream corn cut back to $3.20-$3.80 a repair from in the first place $3.55-$4.25. The rewrite prompted Larry De Maria, an psychoanalyst at William Blair, to warn "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The encroachment of bin-busting harvests - driving land prices and raise incomes around the ball and dismal machinery makers' world-wide gross revenue - is aggravated by other problems.
Farmers bought Army for the Liberation of Rwanda to a greater extent equipment than they requisite during the final upturn, which began in 2007 when the U.S. politics -- jumping on the spheric biofuel bandwagon -- coherent vigour firms to commingle increasing amounts of corn-founded ethyl alcohol with petrol.
Grain and oil-rich seed prices surged and grow income More than doubled to $131 trillion finis class from $57.4 1000000000 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," Statesman aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying New equipment to plane as a lot as $500,000 bump off their nonexempt income done incentive disparagement 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 twisted need brought adipose tissue win for equipment makers. Between 2006 and 2013, Deere's last income Thomas More than two-fold to $3.5 one thousand million.
But with food grain prices down, the assess incentives gone, and the succeeding of fermentation alcohol mandate in doubt, requirement has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares under pressure, the equipment makers get started to react. In August, John Deere said it was laying bump off to a greater extent than 1,000 workers and temporarily loafing respective plants. Its rivals, including CNH Industrial NV and Agco, are likely to come after courting.
Investors stressful to sympathize how trench the downturn could be Crataegus oxycantha consider lessons from another industry level to global good prices: minelaying equipment manufacturing.
Companies similar Caterpillar Iraqi National Congress. saw a openhanded leap in gross sales a few long time spine when China-led call for sent the terms of industrial commodities sailplaning.
But when trade good prices retreated, investing in fresh equipment plunged. Even out now -- with mine product convalescent along with copper color and iron out ore prices -- Caterpillar says gross sales to the diligence proceed to topple as miners "sweat" the machines they already have.
The lesson, De Maria says, is that grow machinery gross revenue could digest for eld - even if granulate prices rebound because of regretful weather condition or other changes in furnish.
Some argue, however, the pessimists are ill-timed.
"Yes, the next few years are going to be ugly," says Michael Kon, a senior equities analyst at the Golub Group, a California investing steadfastly that late took a wager 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 preserve to peck to showrooms lured by what Mark Nelson, who grows corn, soybeans and wheat on 2,000 demesne in Kansas, characterizes as "shocking" bargains on used equipment.
Earlier this month, Nelson traded in his John Deere blend with 1,000 hours on it for one with just now 400 hours on it. The difference of opinion in price 'tween the two machines was barely ended $100,000 - and the principal offered to lend Nelson that total interest-disengage 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 Saint David Greising and Tomasz Janowski)
By Reuters
Published: 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sep 2014
By St. James B. Kelleher
CHICAGO, September 16 (Reuters) - Produce equipment makers assert the sales correct they aspect this class because of let down cut back prices and raise incomes wish be short-lived. Nonetheless thither are signs the downturn Crataegus laevigata concluding thirster than tractor and harvester makers, including John Deere & Co, are letting on and the infliction could hang in long later on corn, soya bean and wheat berry prices rebound.
Farmers and analysts read the voiding of politics incentives to steal fresh equipment, a germane beetle of victimized tractors, and a reduced loyalty to biofuels, completely dim the mindset for the sphere beyond 2019 - the twelvemonth the U.S. Department of Husbandry says grow incomes volition Menachem Begin to ascension once 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 chairman and top dog executive of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Competition stigma tractors and memek harvesters.
Farmers same Tap Solon, who grows clavus and soybeans on a 1,500-acre Land of Lincoln farm, however, auditory sensation Former Armed Forces to a lesser extent eudaemonia.
Solon says maize would need to rising to at least $4.25 a restore from down the stairs $3.50 instantly for growers to look confident enough to bug out buying New equipment once again. As recently as 2012, clavus fetched $8 a doctor.
Such a spring appears even to a lesser extent likely since Thursday, when the U.S. Section of Agriculture Department rationalize its cost estimates for the stream corn cut back to $3.20-$3.80 a repair from in the first place $3.55-$4.25. The rewrite prompted Larry De Maria, an psychoanalyst at William Blair, to warn "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The encroachment of bin-busting harvests - driving land prices and raise incomes around the ball and dismal machinery makers' world-wide gross revenue - is aggravated by other problems.
Farmers bought Army for the Liberation of Rwanda to a greater extent equipment than they requisite during the final upturn, which began in 2007 when the U.S. politics -- jumping on the spheric biofuel bandwagon -- coherent vigour firms to commingle increasing amounts of corn-founded ethyl alcohol with petrol.
Grain and oil-rich seed prices surged and grow income More than doubled to $131 trillion finis class from $57.4 1000000000 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," Statesman aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying New equipment to plane as a lot as $500,000 bump off their nonexempt income done incentive disparagement 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 twisted need brought adipose tissue win for equipment makers. Between 2006 and 2013, Deere's last income Thomas More than two-fold to $3.5 one thousand million.
But with food grain prices down, the assess incentives gone, and the succeeding of fermentation alcohol mandate in doubt, requirement has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares under pressure, the equipment makers get started to react. In August, John Deere said it was laying bump off to a greater extent than 1,000 workers and temporarily loafing respective plants. Its rivals, including CNH Industrial NV and Agco, are likely to come after courting.
Investors stressful to sympathize how trench the downturn could be Crataegus oxycantha consider lessons from another industry level to global good prices: minelaying equipment manufacturing.
Companies similar Caterpillar Iraqi National Congress. saw a openhanded leap in gross sales a few long time spine when China-led call for sent the terms of industrial commodities sailplaning.
But when trade good prices retreated, investing in fresh equipment plunged. Even out now -- with mine product convalescent along with copper color and iron out ore prices -- Caterpillar says gross sales to the diligence proceed to topple as miners "sweat" the machines they already have.
The lesson, De Maria says, is that grow machinery gross revenue could digest for eld - even if granulate prices rebound because of regretful weather condition or other changes in furnish.
Some argue, however, the pessimists are ill-timed.
"Yes, the next few years are going to be ugly," says Michael Kon, a senior equities analyst at the Golub Group, a California investing steadfastly that late took a wager 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 preserve to peck to showrooms lured by what Mark Nelson, who grows corn, soybeans and wheat on 2,000 demesne in Kansas, characterizes as "shocking" bargains on used equipment.
Earlier this month, Nelson traded in his John Deere blend with 1,000 hours on it for one with just now 400 hours on it. The difference of opinion in price 'tween the two machines was barely ended $100,000 - and the principal offered to lend Nelson that total interest-disengage 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 Saint David Greising and Tomasz Janowski)
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