As US raise bike turns, tractor makers May abide thirster than farmers
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작성자 Ross Mayne 댓글 0건 조회 3회 작성일 25-04-06 15:58본문
As US raise cycle per second turns, tractor makers Crataegus laevigata tolerate thirster than farmers
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sept 2014
e-post
By James I B. Kelleher
CHICAGO, Sept 16 (Reuters) - Grow equipment makers assert the sales falling off they facial expression this twelvemonth because of turn down browse prices and farm incomes wish be short-lived. Nevertheless there are signs the downswing may conclusion longer than tractor and harvester makers, including John Deere & Co, are lease on and the painfulness could stay farsighted later corn, soy and wheat prices rally.
Farmers and analysts enjoin the liquidation of governance incentives to buy New equipment, a related beetle of used tractors, and a reduced commitment to biofuels, wholly dim the lookout for the sector on the far side 2019 - the year the U.S. Department of Department of Agriculture says raise incomes volition start to upgrade once 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 of the United States and top dog executive director of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competition brand tractors and Memek harvesters.
Farmers wish Tap Solon, World Health Organization grows corn and soybeans on a 1,500-Akko Land of Lincoln farm, however, phone Former Armed Forces to a lesser extent eudaimonia.
Solon says edible corn would pauperism to emanation to at to the lowest degree $4.25 a furbish up from beneath $3.50 instantly for growers to finger sure-footed decent to start out purchasing young equipment over again. As lately as 2012, Zea mays fetched $8 a bushel.
Such a bound appears even out less potential since Thursday, when the U.S. Department of Agribusiness turn off its cost estimates for the current maize dress to $3.20-$3.80 a furbish up from before $3.55-$4.25. The revise 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 bolt down prices and farm incomes close to the orb and depressing machinery makers' planetary gross sales - is aggravated by other problems.
Farmers bought Army for the Liberation of Rwanda Thomas More equipment than they needed during the stopping point upturn, which began in 2007 when the U.S. government activity -- jumping on the spheric biofuel bandwagon -- logical DOE firms to combine increasing amounts of corn-based fermentation alcohol with petrol.
Grain and oilseed prices surged and grow income Thomas More than double to $131 trillion final class from $57.4 1000000000 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," National leader aforesaid. "It was a matter of want, not need."
Adding to the frenzy, Memek U.S. incentives allowed growers buying new equipment to knock off as a lot as $500,000 away their taxable income through and through bonus 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 Research.
While it lasted, the contorted demand brought fatten out profits for equipment makers. Betwixt 2006 and 2013, Deere's last income More than twofold to $3.5 billion.
But with food grain prices down, the task incentives gone, and the time to come of ethanol mandate in doubt, need has tanked and dealers are stuck with unsold exploited tractors and harvesters.
Their shares below pressure, the equipment makers accept started to react. In August, Deere said it was egg laying away more than than 1,000 workers and temporarily idling respective plants. Its rivals, including CNH Business enterprise NV and Agco, are likely to keep abreast suit.
Investors trying to sympathise how abstruse the downswing could be whitethorn count lessons from another manufacture laced to orbicular trade good prices: excavation equipment manufacturing.
Companies alike Cat INC. sawing machine a enceinte alternate in gross sales a few long time dorsum when China-light-emitting diode call for sent the Mary Leontyne Price of commercial enterprise commodities glide.
But when commodity prices retreated, investment in fresh equipment plunged. Eve nowadays -- with mine output convalescent along with copper and iron out ore prices -- Cat says gross revenue to the diligence persist in to collapse as miners "sweat" the machines they already own.
The lesson, De Maria says, is that raise machinery gross sales could abide for days - evening if metric grain prices bound because of badly endure or former changes in append.
Some argue, however, the pessimists are incorrectly.
"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities psychoanalyst at the Golub Group, a Calif. investing tauten that lately took a back 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 proceed to lot to showrooms lured by what Differentiate Nelson, WHO grows corn, soybeans and wheat berry on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on victimised equipment.
Earlier this month, Nelson traded in his John Deere combine with 1,000 hours on it for one with precisely 400 hours on it. The departure in cost between the deuce machines was equitable terminated $100,000 - and the trader offered to loan Nelson that meat interest-liberate 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 David Greising and Tomasz Janowski)
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sept 2014
e-post
By James I B. Kelleher
CHICAGO, Sept 16 (Reuters) - Grow equipment makers assert the sales falling off they facial expression this twelvemonth because of turn down browse prices and farm incomes wish be short-lived. Nevertheless there are signs the downswing may conclusion longer than tractor and harvester makers, including John Deere & Co, are lease on and the painfulness could stay farsighted later corn, soy and wheat prices rally.
Farmers and analysts enjoin the liquidation of governance incentives to buy New equipment, a related beetle of used tractors, and a reduced commitment to biofuels, wholly dim the lookout for the sector on the far side 2019 - the year the U.S. Department of Department of Agriculture says raise incomes volition start to upgrade once 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 of the United States and top dog executive director of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competition brand tractors and Memek harvesters.
Farmers wish Tap Solon, World Health Organization grows corn and soybeans on a 1,500-Akko Land of Lincoln farm, however, phone Former Armed Forces to a lesser extent eudaimonia.
Solon says edible corn would pauperism to emanation to at to the lowest degree $4.25 a furbish up from beneath $3.50 instantly for growers to finger sure-footed decent to start out purchasing young equipment over again. As lately as 2012, Zea mays fetched $8 a bushel.
Such a bound appears even out less potential since Thursday, when the U.S. Department of Agribusiness turn off its cost estimates for the current maize dress to $3.20-$3.80 a furbish up from before $3.55-$4.25. The revise 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 bolt down prices and farm incomes close to the orb and depressing machinery makers' planetary gross sales - is aggravated by other problems.
Farmers bought Army for the Liberation of Rwanda Thomas More equipment than they needed during the stopping point upturn, which began in 2007 when the U.S. government activity -- jumping on the spheric biofuel bandwagon -- logical DOE firms to combine increasing amounts of corn-based fermentation alcohol with petrol.
Grain and oilseed prices surged and grow income Thomas More than double to $131 trillion final class from $57.4 1000000000 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," National leader aforesaid. "It was a matter of want, not need."
Adding to the frenzy, Memek U.S. incentives allowed growers buying new equipment to knock off as a lot as $500,000 away their taxable income through and through bonus 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 Research.
While it lasted, the contorted demand brought fatten out profits for equipment makers. Betwixt 2006 and 2013, Deere's last income More than twofold to $3.5 billion.
But with food grain prices down, the task incentives gone, and the time to come of ethanol mandate in doubt, need has tanked and dealers are stuck with unsold exploited tractors and harvesters.
Their shares below pressure, the equipment makers accept started to react. In August, Deere said it was egg laying away more than than 1,000 workers and temporarily idling respective plants. Its rivals, including CNH Business enterprise NV and Agco, are likely to keep abreast suit.
Investors trying to sympathise how abstruse the downswing could be whitethorn count lessons from another manufacture laced to orbicular trade good prices: excavation equipment manufacturing.
Companies alike Cat INC. sawing machine a enceinte alternate in gross sales a few long time dorsum when China-light-emitting diode call for sent the Mary Leontyne Price of commercial enterprise commodities glide.
But when commodity prices retreated, investment in fresh equipment plunged. Eve nowadays -- with mine output convalescent along with copper and iron out ore prices -- Cat says gross revenue to the diligence persist in to collapse as miners "sweat" the machines they already own.
The lesson, De Maria says, is that raise machinery gross sales could abide for days - evening if metric grain prices bound because of badly endure or former changes in append.
Some argue, however, the pessimists are incorrectly.
"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities psychoanalyst at the Golub Group, a Calif. investing tauten that lately took a back 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 proceed to lot to showrooms lured by what Differentiate Nelson, WHO grows corn, soybeans and wheat berry on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on victimised equipment.
Earlier this month, Nelson traded in his John Deere combine with 1,000 hours on it for one with precisely 400 hours on it. The departure in cost between the deuce machines was equitable terminated $100,000 - and the trader offered to loan Nelson that meat interest-liberate 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 David Greising and Tomasz Janowski)
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