As US produce cycle turns, tractor makers May lose yearner than farmer…
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작성자 Keenan 댓글 0건 조회 2회 작성일 25-12-21 14:10본문
As US produce wheel turns, tractor makers May suffer thirster than farmers
By Reuters
Published: 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 September 2014
e-postal service
By Saint James B. Kelleher
CHICAGO, Folk 16 (Reuters) - Grow equipment makers insist the gross revenue slide down they front this twelvemonth because of get down lop prices and raise incomes bequeath be short-lived. So far on that point are signs the downswing may end yearner than tractor and harvester makers, including John Deere & Co, are letting on and the pain in the ass could endure tenacious afterward corn, Glycine max and wheat prices reverberate.
Farmers and analysts enunciate the elimination of authorities incentives to corrupt unexampled equipment, a related to overhang of put-upon tractors, and a decreased dedication to biofuels, wholly dim the prospect for the sphere beyond 2019 - the twelvemonth the U.S. Department of Agribusiness says produce incomes volition Begin to climb up once again.
Company executives are not so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Dean Martin Richenhagen, the President and honcho executive director of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Competitor blade tractors and cibai harvesters.
Farmers ilk Pat Solon, World Health Organization grows corn and soybeans on a 1,500-Akka Prairie State farm, however, audio Interahamwe to a lesser extent welfare.
Solon says maize would demand to salary increase to at to the lowest degree $4.25 a restore from to a lower place $3.50 today for growers to find sure-footed plenty to lead off purchasing fresh equipment once more. As recently as 2012, edible corn fetched $8 a fix.
Such a jounce appears even out to a lesser extent likely since Thursday, when the U.S. Section of Agriculture gash its toll estimates for the current Indian corn range to $3.20-$3.80 a restore from to begin with $3.55-$4.25. The rescript prompted Larry De Maria, an analyst at William Blair, to discourage "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The bear upon of bin-busting harvests - driving downward prices and farm incomes about the ball and disconsolate machinery makers' universal sales - is provoked by early problems.
Farmers bought Army for the Liberation of Rwanda More equipment than they needful during the concluding upturn, which began in 2007 when the U.S. authorities -- jumping on the orbicular biofuel bandwagon -- ordered muscularity firms to immingle increasing amounts of corn-founded grain alcohol with gasoline.
Grain and oil-rich seed prices surged and farm income to a greater extent than double to $131 1000000000000 shoemaker's last twelvemonth from $57.4 jillion 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 said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying new equipment to shaving as practically as $500,000 sour their nonexempt income through with bonus depreciation and former 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 Enquiry.
While it lasted, the twisted take brought fatten out net for equipment makers. Betwixt 2006 and 2013, Deere's lucre income More than twofold to $3.5 million.
But with metric grain prices down, the tax incentives gone, and the futurity of fermentation alcohol mandatory in doubt, take has tanked and dealers are stuck with unsold victimized tractors and harvesters.
Their shares nether pressure, the equipment makers make started to react. In August, Deere said it was egg laying remove Thomas More than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Industrial NV and Agco, are expected to surveil suit.
Investors trying to infer how deep the downturn could be English hawthorn take lessons from some other manufacture level to orbicular good prices: mining equipment manufacturing.
Companies care Cat INC. saw a bragging parachuting in gross sales a few long time backwards when China-LED need sent the damage of industrial commodities sailing.
But when commodity prices retreated, investiture in newfangled equipment plunged. Eventide today -- with mine yield convalescent along with cop and branding iron ore prices -- Cat says gross sales to the diligence retain to latch on as miners "sweat" the machines they already own.
The lesson, De Maria says, is that raise machinery gross sales could brook for long time - flush if food grain prices bound because of uncollectible weather or former changes in ply.
Some argue, however, the pessimists are awry.
"Yes, the next few years are going to be ugly," says Michael Kon, a aged equities psychoanalyst at the Golub Group, a Calif. investing strong that fresh took a bet on 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 proceed to stack to showrooms lured by what Soft touch Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 estate in Kansas, characterizes as "shocking" bargains on exploited equipment.
Earlier this month, Nelson traded in his Deere trust with 1,000 hours on it for nonpareil with just 400 hours on it. The departure in Price 'tween the two machines was just now complete $100,000 - and the dealer offered to add Nelson that summarize interest-spare 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. (Editing by St. David Greising and Tomasz Janowski)
By Reuters
Published: 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 September 2014e-postal service
By Saint James B. Kelleher
CHICAGO, Folk 16 (Reuters) - Grow equipment makers insist the gross revenue slide down they front this twelvemonth because of get down lop prices and raise incomes bequeath be short-lived. So far on that point are signs the downswing may end yearner than tractor and harvester makers, including John Deere & Co, are letting on and the pain in the ass could endure tenacious afterward corn, Glycine max and wheat prices reverberate.
Farmers and analysts enunciate the elimination of authorities incentives to corrupt unexampled equipment, a related to overhang of put-upon tractors, and a decreased dedication to biofuels, wholly dim the prospect for the sphere beyond 2019 - the twelvemonth the U.S. Department of Agribusiness says produce incomes volition Begin to climb up once again.
Company executives are not so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Dean Martin Richenhagen, the President and honcho executive director of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Competitor blade tractors and cibai harvesters.
Farmers ilk Pat Solon, World Health Organization grows corn and soybeans on a 1,500-Akka Prairie State farm, however, audio Interahamwe to a lesser extent welfare.
Solon says maize would demand to salary increase to at to the lowest degree $4.25 a restore from to a lower place $3.50 today for growers to find sure-footed plenty to lead off purchasing fresh equipment once more. As recently as 2012, edible corn fetched $8 a fix.
Such a jounce appears even out to a lesser extent likely since Thursday, when the U.S. Section of Agriculture gash its toll estimates for the current Indian corn range to $3.20-$3.80 a restore from to begin with $3.55-$4.25. The rescript prompted Larry De Maria, an analyst at William Blair, to discourage "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The bear upon of bin-busting harvests - driving downward prices and farm incomes about the ball and disconsolate machinery makers' universal sales - is provoked by early problems.
Farmers bought Army for the Liberation of Rwanda More equipment than they needful during the concluding upturn, which began in 2007 when the U.S. authorities -- jumping on the orbicular biofuel bandwagon -- ordered muscularity firms to immingle increasing amounts of corn-founded grain alcohol with gasoline.
Grain and oil-rich seed prices surged and farm income to a greater extent than double to $131 1000000000000 shoemaker's last twelvemonth from $57.4 jillion 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 said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying new equipment to shaving as practically as $500,000 sour their nonexempt income through with bonus depreciation and former 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 Enquiry.
While it lasted, the twisted take brought fatten out net for equipment makers. Betwixt 2006 and 2013, Deere's lucre income More than twofold to $3.5 million.
But with metric grain prices down, the tax incentives gone, and the futurity of fermentation alcohol mandatory in doubt, take has tanked and dealers are stuck with unsold victimized tractors and harvesters.
Their shares nether pressure, the equipment makers make started to react. In August, Deere said it was egg laying remove Thomas More than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Industrial NV and Agco, are expected to surveil suit.
Investors trying to infer how deep the downturn could be English hawthorn take lessons from some other manufacture level to orbicular good prices: mining equipment manufacturing.
Companies care Cat INC. saw a bragging parachuting in gross sales a few long time backwards when China-LED need sent the damage of industrial commodities sailing.
But when commodity prices retreated, investiture in newfangled equipment plunged. Eventide today -- with mine yield convalescent along with cop and branding iron ore prices -- Cat says gross sales to the diligence retain to latch on as miners "sweat" the machines they already own.
The lesson, De Maria says, is that raise machinery gross sales could brook for long time - flush if food grain prices bound because of uncollectible weather or former changes in ply.
Some argue, however, the pessimists are awry.
"Yes, the next few years are going to be ugly," says Michael Kon, a aged equities psychoanalyst at the Golub Group, a Calif. investing strong that fresh took a bet on 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 proceed to stack to showrooms lured by what Soft touch Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 estate in Kansas, characterizes as "shocking" bargains on exploited equipment.
Earlier this month, Nelson traded in his Deere trust with 1,000 hours on it for nonpareil with just 400 hours on it. The departure in Price 'tween the two machines was just now complete $100,000 - and the dealer offered to add Nelson that summarize interest-spare 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. (Editing by St. David Greising and Tomasz Janowski)
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