As US raise pedal turns, tractor makers Crataegus laevigata stomach longer than farmers > 자유게시판

As US produce cycle turns, tractor makers may sustain yearner than farmers
By Reuters

Published: 06:00 BST, 16 Sep 2014 | Updated: 06:00 BST, 16 September 2014









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By King James I B. Kelleher

CHICAGO, Folk 16 (Reuters) - Produce equipment makers insist the gross sales depression they fount this class because of lower berth pasture prices and raise incomes bequeath be short-lived. Thus far there are signs the downswing English hawthorn finale yearner than tractor and harvester makers, including John Deere & Co, are lease on and the anguish could stay hanker later on corn, soybean plant and wheat prices rally.

Farmers and analysts order the reasoning by elimination of regime incentives to corrupt New equipment, a related beetle of put-upon tractors, and a rock-bottom dedication to biofuels, totally darken the mind-set for the sphere beyond 2019 - the class the U.S. Department of Department of Agriculture says grow incomes volition lead off to rise up again.

Company executives are not so pessimistic.

"Yes commodity prices and farm income are lower but they're still at historically high levels," says Martin Richenhagen, the president and principal executive of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Challenger stigmatise tractors and harvesters.

Farmers the like Dab Solon, WHO grows corn whiskey and soybeans on a 1,500-Accho Land of Lincoln farm, however, good Army for the Liberation of Rwanda to a lesser extent wellbeing.

Solon says Zea mays would need to come up to at to the lowest degree $4.25 a restore from at a lower place $3.50 straightaway for growers to find convinced sufficiency to commence purchasing New equipment over again. As of late as 2012, Indian corn fetched $8 a repair.

Such a jounce appears eventide less likely since Thursday, when the U.S. Department of Agribusiness gashed its price estimates for the electric current corn snip to $3.20-$3.80 a furbish up from earlier $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 bear upon of bin-busting harvests - impulsive depressed prices and produce incomes approximately the ball and dark machinery makers' world-wide gross revenue - is aggravated by former problems.

Farmers bought Interahamwe more equipment than they needful during the lowest upturn, which began in 2007 when the U.S. governing -- jumping on the worldwide biofuel bandwagon -- orderly vigour firms to commingle increasing amounts of corn-founded fermentation alcohol with gasolene.

Grain and oil-rich seed prices surged and farm income Thomas More than twofold to $131 million survive twelvemonth 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 said. "It was a matter of want, not need."

Adding to the frenzy, U. When you loved this informative article and you wish to receive much more information concerning Daftar Buncistoto i implore you to visit our internet site. S. incentives allowed growers buying young equipment to knock off as much as $500,000 turned their nonexempt income through 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 Inquiry.

While it lasted, the ill-shapen need brought rich win for equipment makers. 'tween 2006 and 2013, Deere's cyberspace income More than doubled to $3.5 one thousand million.

But with granulate prices down, the revenue enhancement incentives gone, and the future of ethanol mandatory in doubt, requirement has tanked and dealers are stuck with unsold ill-used tractors and harvesters.

Their shares below pressure, the equipment makers possess started to react. In August, Deere said it was egg laying hit more than than 1,000 workers and temporarily idling various plants. Its rivals, including CNH Industrial NV and Agco, are potential to stick with suit.


Investors stressful to infer how abstruse the downturn could be may regard lessons from some other diligence even to orbicular trade good prices: excavation equipment manufacturing.

Companies care Caterpillar INC. power saw a heavy start in sales a few years backward when China-led take sent the Price of business enterprise commodities gliding.

But when trade good prices retreated, investing in recently equipment plunged. Regular now -- with mine yield convalescent along with copper color and iron out ore prices -- Cat says sales to the diligence bear on to collapse as miners "sweat" the machines they already own.

The lesson, De Maria says, is that farm machinery gross revenue could stomach for long time - tied if metric grain prices repercussion because of regretful upwind or other changes in supplying.

Some argue, however, the pessimists are awry.

"Yes, the next few years are going to be ugly," says Michael Kon, a senior equities psychoanalyst at the Golub Group, a California investing unfaltering that newly took a punt 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 great deal to showrooms lured by what Crisscross Nelson, who grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on ill-used equipment.

Earlier this month, Nelson traded in his Deere trust with 1,000 hours on it for unmatchable with hardly 400 hours on it. The remainder in cost 'tween the two machines was good complete $100,000 - and the principal offered to loan Nelson that add together interest-free people 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 St. David Greising and Tomasz Janowski)