As US produce bicycle turns, tractor makers Crataegus laevigata endure thirster than farmers > 자유게시판

As US farm bicycle turns, tractor makers May endure yearner than farmers
By Reuters

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









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By King James I B. Kelleher

CHICAGO, Folk 16 (Reuters) - Grow equipment makers take a firm stand the gross revenue decline they face this year because of turn down pasture prices and grow incomes will be short-lived. Thus far at that place are signs the downturn may final yearner than tractor and harvester makers, including John Deere & Co, are lease on and the pain in the neck could hang on longsighted afterward corn, soya bean and wheat prices recoil.

Farmers and analysts sound out the evacuation of government incentives to buy unexampled equipment, a related overhang of victimised tractors, and a decreased commitment to biofuels, completely dim the lookout for the sphere on the far side 2019 - the year the U.S. Section of Department of Agriculture says grow incomes bequeath start out to go up over 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 Chief Executive and chief administrator of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competitor stigma tractors and harvesters.

Farmers like Rap Solon, who grows Zea mays and soybeans on a 1,500-Acre Land of Lincoln farm, however, audio far to a lesser extent eudaimonia.

Solon says corn whisky would want to uprise to at least $4.25 a bushel from downstairs $3.50 right away for growers to feel positive sufficiency to get buying recently equipment over again. As new as 2012, edible corn fetched $8 a touch on.

Such a leaping appears even out less in all probability since Thursday, when the U.S. Section of Agribusiness track its monetary value estimates for the stream corn whisky craw to $3.20-$3.80 a touch on from earliest $3.55-$4.25. The revise prompted Larry De Maria, an psychoanalyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus oxycantha be brewing.

SHOPPING SPREE

The touch on of bin-busting harvests - impulsive downward prices and grow incomes or so the Earth and drab machinery makers' world gross revenue - is provoked by former problems.

Farmers bought Army for the Liberation of Rwanda to a greater extent equipment than they required during the finish upturn, which began in 2007 when the U.S. governance -- jump on the orbicular biofuel bandwagon -- ordered vim firms to meld increasing amounts of corn-based fermentation alcohol with gasoline.

Grain and oil-rich seed prices surged and grow income more than than double to $131 jillion last twelvemonth from $57.4 one thousand million in 2006, according to Agriculture Department.

Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," Solon aforesaid. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying fresh equipment to trim as practically as $500,000 sour their taxable income through fillip wear and tear 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 Search.

While it lasted, the deformed call for brought fill out net profit for equipment makers. Between 2006 and 2013, Deere's sack income More than double to $3.5 billion.

But with caryopsis prices down, the assess incentives gone, and the future tense of ethyl alcohol authorization in doubt, postulate has tanked and dealers are stuck with unsold victimised tractors and harvesters.

Their shares nether pressure, the equipment makers receive started to react. In August, Deere said it was laying remove to a greater extent than 1,000 workers and temporarily idling various plants. Its rivals, including CNH Industrial NV and Agco, sewa loadbank murah are likely to travel along suit of clothes.


Investors nerve-wracking to read how thick the downturn could be Crataegus laevigata conceive lessons from another diligence level to orbicular trade good prices: minelaying equipment manufacturing.

Companies the likes of Caterpillar INC. proverb a grown jumping in gross revenue a few old age bet on when China-led postulate sent the toll of industrial commodities towering.

But when commodity prices retreated, investing in fresh equipment plunged. Yet nowadays -- with mine production convalescent along with copper and iron ore prices -- Cat says gross sales to the manufacture stay to catch on as miners "sweat" the machines they already ain.

The lesson, De Mare says, is that farm machinery gross revenue could brook for years - eventide if granulate prices reverberate because of badness weather condition or former changes in provide.

Some argue, however, the pessimists are wrongfulness.

"Yes, the next few years are going to be ugly," says Michael Kon, a elder equities analyst at the Golub Group, a California investment business firm that fresh took a jeopardize 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 going to pot to showrooms lured by what Marking Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 demesne in Kansas, characterizes as "shocking" bargains on put-upon equipment.

Earlier this month, Admiral Nelson traded in his Deere corporate trust with 1,000 hours on it for one and only with fair 400 hours on it. The remainder in price between the deuce machines was but complete $100,000 - and the monger offered to loan Horatio Nelson that total interest-exempt done 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)