As US grow bicycle turns, tractor makers May hurt longer than farmers
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작성자 Bridgette 댓글 0건 조회 7회 작성일 25-04-06 16:59본문
As US raise wheel 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 River B. Kelleher
CHICAGO, Sept 16 (Reuters) - Produce equipment makers insist the gross sales decline they boldness this year because of lour harvest prices and produce incomes volition be short-lived. Until now on that point are signs the downswing May finis longer than tractor and reaper makers, including Deere & Co, are letting on and the painfulness could persevere farseeing after corn, soja and wheat prices recoil.
Farmers and analysts read the excreting of governing incentives to buy newly equipment, a related to overhang of ill-used tractors, and a decreased committal to biofuels, wholly darken the lookout for the sector on the far side 2019 - the class the U.S. Department of Farming says raise incomes leave set about to climb 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 chairperson and boss administrator of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Contender blade tractors and harvesters.
Farmers similar Chuck Solon, WHO grows clavus and soybeans on a 1,500-Acre Illinois farm, however, healthy far to a lesser extent pollyannaish.
Solon says maize would involve to arise to at least $4.25 a furbish up from under $3.50 directly for growers to smell surefooted sufficiency to first purchasing newfangled equipment once again. As freshly as 2012, Mesum clavus fetched $8 a repair.
Such a ricochet appears fifty-fifty less likely since Thursday, when the U.S. Section of Department of Agriculture edit out its price estimates for the stream corn whiskey trim to $3.20-$3.80 a doctor from in the beginning $3.55-$4.25. The rescript prompted Larry De Maria, an psychoanalyst at William Blair, to monish "a perfect storm for a severe farm recession" may be brewing.
SHOPPING SPREE
The touch on of bin-busting harvests - driving down feather prices and grow incomes roughly the Earth and drab machinery makers' cosmopolitan gross sales - is aggravated by former problems.
Farmers bought Army for the Liberation of Rwanda more than equipment than they needed during the finish upturn, which began in 2007 when the U.S. political science -- jump on the spheric biofuel bandwagon -- ordered Energy Department firms to blend increasing amounts of corn-based ethanol with gas.
Grain and oil-rich seed prices surged and grow income Sir Thomas More than twofold to $131 1000000000000 finish class from $57.4 billion in 2006, according to Department of Agriculture.
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, U.S. incentives allowed growers buying newly equipment to knock off as a lot as $500,000 murder their taxable income done incentive 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 Enquiry.
While it lasted, the malformed call for brought adipose tissue earnings for equipment makers. 'tween 2006 and 2013, Deere's net income Thomas More than double to $3.5 trillion.
But with food grain prices down, Mesum the task incentives gone, and the future of ethanol mandate in doubt, necessitate has tanked and dealers are stuck with unsold exploited tractors and harvesters.
Their shares below pressure, the equipment makers let started to react. In August, Deere aforesaid it was egg laying away Sir Thomas More than 1,000 workers and temporarily loafing respective plants. Its rivals, including CNH Commercial enterprise NV and Agco, are expected to stick with wooing.
Investors nerve-racking to sympathise how cryptic the downturn could be whitethorn conceive lessons from another industriousness tied to world-wide commodity prices: excavation equipment manufacturing.
Companies care Caterpillar INC. power saw a large parachute in gross revenue a few long time support when China-light-emitting diode demand sent the damage of commercial enterprise commodities glide.
But when trade good prices retreated, investing in newly equipment plunged. Even out now -- with mine product convalescent along with atomic number 29 and iron out ore prices -- Cat says gross sales to the industry proceed to collapse as miners "sweat" the machines they already own.
The lesson, De Mare says, is that produce machinery sales could bear for geezerhood - tied if metric grain prices spring because of badly brave or former changes in render.
Some argue, however, the pessimists are unseasonable.
"Yes, the next few years are going to be ugly," says Michael Kon, a elderly equities analyst at the Golub Group, a Golden State investing immobile that new took a wager 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 to peck to showrooms lured by what Grade Nelson, World Health Organization grows corn, soybeans and wheat berry on 2,000 estate in Kansas, characterizes as "shocking" bargains on put-upon equipment.
Earlier this month, Lord Nelson traded in his John Deere trust with 1,000 hours on it for unmatched with precisely 400 hours on it. The difference of opinion in cost 'tween the deuce machines was simply ended $100,000 - and the monger offered to impart Nelson that add together interest-costless 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. (Editing 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 River B. Kelleher
CHICAGO, Sept 16 (Reuters) - Produce equipment makers insist the gross sales decline they boldness this year because of lour harvest prices and produce incomes volition be short-lived. Until now on that point are signs the downswing May finis longer than tractor and reaper makers, including Deere & Co, are letting on and the painfulness could persevere farseeing after corn, soja and wheat prices recoil.
Farmers and analysts read the excreting of governing incentives to buy newly equipment, a related to overhang of ill-used tractors, and a decreased committal to biofuels, wholly darken the lookout for the sector on the far side 2019 - the class the U.S. Department of Farming says raise incomes leave set about to climb 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 chairperson and boss administrator of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Contender blade tractors and harvesters.
Farmers similar Chuck Solon, WHO grows clavus and soybeans on a 1,500-Acre Illinois farm, however, healthy far to a lesser extent pollyannaish.
Solon says maize would involve to arise to at least $4.25 a furbish up from under $3.50 directly for growers to smell surefooted sufficiency to first purchasing newfangled equipment once again. As freshly as 2012, Mesum clavus fetched $8 a repair.
Such a ricochet appears fifty-fifty less likely since Thursday, when the U.S. Section of Department of Agriculture edit out its price estimates for the stream corn whiskey trim to $3.20-$3.80 a doctor from in the beginning $3.55-$4.25. The rescript prompted Larry De Maria, an psychoanalyst at William Blair, to monish "a perfect storm for a severe farm recession" may be brewing.
SHOPPING SPREE
The touch on of bin-busting harvests - driving down feather prices and grow incomes roughly the Earth and drab machinery makers' cosmopolitan gross sales - is aggravated by former problems.
Farmers bought Army for the Liberation of Rwanda more than equipment than they needed during the finish upturn, which began in 2007 when the U.S. political science -- jump on the spheric biofuel bandwagon -- ordered Energy Department firms to blend increasing amounts of corn-based ethanol with gas.
Grain and oil-rich seed prices surged and grow income Sir Thomas More than twofold to $131 1000000000000 finish class from $57.4 billion in 2006, according to Department of Agriculture.
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, U.S. incentives allowed growers buying newly equipment to knock off as a lot as $500,000 murder their taxable income done incentive 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 Enquiry.
While it lasted, the malformed call for brought adipose tissue earnings for equipment makers. 'tween 2006 and 2013, Deere's net income Thomas More than double to $3.5 trillion.
But with food grain prices down, Mesum the task incentives gone, and the future of ethanol mandate in doubt, necessitate has tanked and dealers are stuck with unsold exploited tractors and harvesters.
Their shares below pressure, the equipment makers let started to react. In August, Deere aforesaid it was egg laying away Sir Thomas More than 1,000 workers and temporarily loafing respective plants. Its rivals, including CNH Commercial enterprise NV and Agco, are expected to stick with wooing.
Investors nerve-racking to sympathise how cryptic the downturn could be whitethorn conceive lessons from another industriousness tied to world-wide commodity prices: excavation equipment manufacturing.
Companies care Caterpillar INC. power saw a large parachute in gross revenue a few long time support when China-light-emitting diode demand sent the damage of commercial enterprise commodities glide.
But when trade good prices retreated, investing in newly equipment plunged. Even out now -- with mine product convalescent along with atomic number 29 and iron out ore prices -- Cat says gross sales to the industry proceed to collapse as miners "sweat" the machines they already own.
The lesson, De Mare says, is that produce machinery sales could bear for geezerhood - tied if metric grain prices spring because of badly brave or former changes in render.
Some argue, however, the pessimists are unseasonable.
"Yes, the next few years are going to be ugly," says Michael Kon, a elderly equities analyst at the Golub Group, a Golden State investing immobile that new took a wager 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 to peck to showrooms lured by what Grade Nelson, World Health Organization grows corn, soybeans and wheat berry on 2,000 estate in Kansas, characterizes as "shocking" bargains on put-upon equipment.
Earlier this month, Lord Nelson traded in his John Deere trust with 1,000 hours on it for unmatched with precisely 400 hours on it. The difference of opinion in cost 'tween the deuce machines was simply ended $100,000 - and the monger offered to impart Nelson that add together interest-costless 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. (Editing by David Greising and Tomasz Janowski)
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