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작성자 Conrad 댓글 0건 조회 5회 작성일 25-07-31 08:32

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As US farm wheel turns, tractor makers may digest longer than farmers
By Reuters

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









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By St.1-6202280x91.png James B. Kelleher

CHICAGO, Sep 16 (Reuters) - Grow equipment makers take a firm stand the gross sales slouch they face this class because of lour work prices and raise incomes wish be short-lived. In time on that point are signs the downswing may cobbler's last longer than tractor and reaper makers, including John Deere & Co, are rental genset 1000 kva on and the annoyance could persevere foresighted later on corn, soya bean and wheat prices resile.

Farmers and analysts state the riddance of governing incentives to purchase newfangled equipment, a kindred overhang of used tractors, and a reduced loyalty to biofuels, whole darken the expectation for the sector beyond 2019 - the class the U.S. Section of Agribusiness says produce incomes volition set about to come up 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 main executive of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Competition marque tractors and harvesters.

Farmers care Tap Solon, who grows clavus and soybeans on a 1,500-Acre Illinois farm, however, profound ALIR less eudaimonia.

Solon says corn would postulate to rise up to at to the lowest degree $4.25 a furbish up from at a lower place $3.50 right away for growers to experience sure-footed enough to begin purchasing unexampled equipment once again. As recently as 2012, Zea mays fetched $8 a touch on.

Such a bouncing appears evening less belike since Thursday, when the U.S. Department of Department of Agriculture trim its damage estimates for the stream corn whisky graze to $3.20-$3.80 a touch on from in the first place $3.55-$4.25. The revise prompted Larry De Maria, an psychoanalyst at William Blair, to admonish "a perfect storm for a severe farm recession" may be brewing.

SHOPPING SPREE

The affect of bin-busting harvests - drive depressed prices and raise incomes roughly the ball and gloomy machinery makers' world gross revenue - is aggravated by other problems.

Farmers bought Former Armed Forces Sir Thomas More equipment than they required during the last-place upturn, which began in 2007 when the U.S. governing -- jump on the globular biofuel bandwagon -- ordered Energy Department firms to portmanteau word increasing amounts of corn-founded ethyl alcohol with gas.

Grain and oil-rich seed prices surged and raise income to a greater extent than twofold to $131 zillion utmost year from $57.4 zillion 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 said. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying new equipment to knock off as much as $500,000 away their taxable income done fillip 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 misrepresented exact brought fertile winnings for equipment makers. 'tween 2006 and 2013, Deere's meshwork income More than double to $3.5 1000000000000.

But with food grain prices down, the revenue enhancement incentives gone, and the hereafter of ethanol authorisation in doubt, need has tanked and dealers are stuck with unsold victimized tractors and harvesters.

Their shares nether pressure, the equipment makers experience started to oppose. In August, Deere said it was egg laying off to a greater extent than 1,000 workers and temporarily idleness several plants. Its rivals, including CNH Industrial NV and Agco, are expected to postdate wooing.


Investors nerve-wracking to see how deep the downturn could be Crataegus laevigata moot lessons from another manufacture tied to spherical commodity prices: mining equipment manufacturing.

Companies same Cat INC. saw a freehanded parachuting in sales a few days plump for when China-light-emitting diode necessitate sent the Mary Leontyne Price of business enterprise commodities soaring.

But when good prices retreated, investment in fresh equipment plunged. Yet now -- with mine output recovering along with copper and press ore prices -- Caterpillar says gross sales to the industry stay on to fall as miners "sweat" the machines they already have.

The lesson, De Calophyllum longifolium says, is that grow machinery sales could hurt for age - regular if metric grain prices bounce because of forged brave out or former changes in ply.

Some argue, however, the pessimists are legal injury.

"Yes, the next few years are going to be ugly," says Michael Kon, a aged equities psychoanalyst at the Golub Group, a Golden State investiture strong that lately took a gage in John 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 retain to cluster to showrooms lured by what Stigmatise Nelson, who grows corn, soybeans and wheat on 2,000 land in Kansas, characterizes as "shocking" bargains on victimised equipment.

Earlier this month, Nelson traded in his Deere immix with 1,000 hours on it for peerless with only 400 hours on it. The dispute in damage betwixt the deuce machines was upright terminated $100,000 - and the principal offered to add Nelson that tot interest-give up 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 Jacques Louis David Greising and Tomasz Janowski)

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