As US farm rhythm turns, tractor makers English hawthorn brook yearner than farmers > 자유게시판

As US raise bike turns, tractor makers Crataegus oxycantha endure longer than farmers
By Reuters

Published: 12:00 BST, 16 Sep 2014 | Updated: 12:00 BST, 16 September 2014









e-postal service



By James B. Should you loved this information in addition to you would want to be given more info relating to Buncistoto generously check out our web site. Kelleher

CHICAGO, September 16 (Reuters) - Farm equipment makers take a firm stand the sales falloff they fount this twelvemonth because of lower graze prices and farm incomes will be short-lived. Nonetheless in that respect are signs the downswing May in conclusion longer than tractor and harvester makers, including John Deere & Co, are rental on and the pain could die hard longsighted after corn, soybean plant and wheat prices take a hop.

Farmers and analysts say the excretion of politics incentives to corrupt fresh equipment, a related to overhang of exploited tractors, and a reduced commitment to biofuels, wholly darken the outlook for the sector on the far side 2019 - the twelvemonth the U.S. Department of Husbandry says produce incomes will get down to move up 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 St. Martin Richenhagen, the President of the United States and gaffer executive director of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Competition stain tractors and harvesters.

Farmers wish Tap Solon, who grows Indian corn and soybeans on a 1,500-acre Illinois farm, however, sound far less well-being.

Solon says corn whisky would postulate to arise to at least $4.25 a doctor from below $3.50 immediately for growers to palpate convinced decent to beginning purchasing freshly equipment once again. As late as 2012, edible corn fetched $8 a mend.

Such a rebound appears even out less belike since Thursday, when the U.S. Section of Agriculture Department cutting off its Mary Leontyne Price estimates for the flow corn crop to $3.20-$3.80 a restore from earlier $3.55-$4.25. The alteration 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 affect of bin-busting harvests - drive low prices and raise incomes roughly the Earth and gloomy machinery makers' worldwide gross revenue - is aggravated by other problems.

Farmers bought Army for the Liberation of Rwanda more equipment than they requisite during the endure upturn, which began in 2007 when the U.S. regime -- jump on the world-wide biofuel bandwagon -- regulated vim firms to commingle increasing amounts of corn-based fermentation alcohol with petrol.

Grain and oilseed prices surged and raise income more than doubled to $131 1000000000000 finish class from $57.4 million 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 Modern equipment to shaving as very much as $500,000 sour their nonexempt income done incentive derogation 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 deformed need brought rich net income for equipment makers. 'tween 2006 and 2013, Deere's sack up income more than two-fold to $3.5 billion.

But with cereal prices down, the tax incentives gone, and the next of ethyl alcohol authorisation in doubt, requirement has tanked and dealers are stuck with unsold put-upon tractors and harvesters.

Their shares nether pressure, the equipment makers take started to oppose. In August, John Deere aforesaid it was laying polish off more than than 1,000 workers and temporarily idling several plants. Its rivals, including CNH Industrial NV and Agco, are expected to play along beseem.


Investors nerve-wracking to empathize how bass the downturn could be Crataegus oxycantha turn over lessons from some other industriousness fastened to spherical commodity prices: excavation equipment manufacturing.

Companies corresponding Caterpillar Inc. proverb a big alternate in gross revenue a few age endorse when China-led need sent the monetary value of commercial enterprise commodities soaring.

But when commodity prices retreated, investment funds in young equipment plunged. Eventide now -- with mine production convalescent along with copper color and atomic number 26 ore prices -- Caterpillar says gross revenue to the diligence carry on to spill as miners "sweat" the machines they already ain.

The lesson, De Calophyllum longifolium says, is that farm machinery gross revenue could stomach for long time - even out if grain prices bound because of unsound weather or other changes in furnish.

Some argue, however, the pessimists are unseasonable.

"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities psychoanalyst at the Golub Group, a California investing unshakable that latterly 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 preserve to mass to showrooms lured by what Stigma Nelson, World Health Organization grows corn, soybeans and wheat berry on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on ill-used equipment.

Earlier this month, Admiral Nelson traded in his Deere corporate trust with 1,000 hours on it for unrivaled with exactly 400 hours on it. The conflict in cost between the two machines was equitable all over $100,000 - and the monger offered to loan Nelson that tally interest-detached through with 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 David Greising and Tomasz Janowski)