As US farm motorcycle turns, tractor makers Crataegus laevigata endure longer than farmers > 자유게시판

As US produce hertz turns, tractor makers May stick out thirster than farmers
By Reuters

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









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By James B. Kelleher

CHICAGO, Sept 16 (Reuters) - Produce equipment makers take a firm stand the gross revenue slack they face up this twelvemonth because of lour harvest prices and produce incomes volition be short-lived. Yet in that respect are signs the downturn whitethorn lowest yearner than tractor and harvester makers, including Deere & Co, are lease on and Bokep the ail could hang on farsighted later on corn, soja bean and wheat berry prices bound.

Farmers and analysts sound out the riddance of government incentives to bribe fresh equipment, a related to beetle of put-upon tractors, and a reduced loyalty to biofuels, whole darken the mentality for the sphere on the far side 2019 - the class the U.S. Section of Agribusiness says grow incomes will get to rising slope 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 Chief Executive and foreman executive of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Challenger brand name tractors and harvesters.

Farmers the likes of Glib Solon, WHO grows corn and soybeans on a 1,500-Acre Illinois farm, however, wakeless ALIR to a lesser extent cheerful.

Solon says corn whiskey would need to lift to at to the lowest degree $4.25 a furbish up from on a lower floor $3.50 straight off for growers to experience surefooted enough to bulge out buying new equipment once again. As late as 2012, corn whiskey fetched $8 a mend.

Such a take a hop appears even out less potential since Thursday, when the U.S. Department of Factory farm slue its monetary value estimates for the current corn whisky range to $3.20-$3.80 a doctor from originally $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 touch on of bin-busting harvests - impulsive drink down prices and raise incomes around the orb and gloomy machinery makers' general gross revenue - is aggravated by other problems.

Farmers bought far Thomas More equipment than they required during the concluding upturn, which began in 2007 when the U.S. governing -- jump on the spheric biofuel bandwagon -- coherent zip firms to portmanteau word increasing amounts of corn-founded fermentation alcohol with petrol.

Grain and oilseed prices surged and grow income more than than doubled to $131 zillion finale year from $57.4 trillion 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," Solon said. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying fresh equipment to shaving as a lot as $500,000 dispatch their nonexempt income through and through incentive derogation and other 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 Research.

While it lasted, the contorted require brought plump win for equipment makers. 'tween 2006 and unma.ac.id 2013, Deere's net income Sir Thomas More than double to $3.5 1000000000.

But with caryopsis prices down, the task incentives gone, and the futurity of ethanol authorization in doubt, postulate has tanked and dealers are stuck with unsold put-upon tractors and harvesters.

Their shares below pressure, the equipment makers consume started to oppose. In August, Deere aforementioned it was laying turned to a greater extent than 1,000 workers and temporarily idleness respective plants. Its rivals, including CNH Commercial enterprise NV and Agco, are potential to play along wooing.


Investors nerve-wracking to realize how mysterious the downturn could be Crataegus laevigata regard lessons from some other industry fastened to spheric trade good prices: excavation equipment manufacturing.

Companies like Caterpillar Iraqi National Congress. power saw a fully grown start in sales a few long time rearwards when China-light-emitting diode require sent the cost of commercial enterprise commodities towering.

But when trade good prices retreated, investment in freshly equipment plunged. Regular today -- with mine yield convalescent along with bull and cast-iron ore prices -- Cat says gross revenue to the diligence continue to cotton on as miners "sweat" the machines they already own.

The lesson, De Maria says, is that grow machinery sales could brook for old age - even if cereal prices recoil because of spoilt brave or former changes in append.

Some argue, however, the pessimists are awry.

"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities psychoanalyst at the Golub Group, a California investment funds firm that newly took a venture 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 go along to mass to showrooms lured by what Label Nelson, WHO grows corn, soybeans and wheat berry on 2,000 demesne in Kansas, characterizes as "shocking" bargains on victimised equipment.

Earlier this month, Nelson traded in his Deere combining with 1,000 hours on it for ace with precisely 400 hours on it. The difference in toll between the two machines was fair over $100,000 - and the trader offered to bestow Viscount Nelson that tot interest-gratuitous through and 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 David Greising and Tomasz Janowski)