As US farm oscillation turns, tractor makers Crataegus laevigata bear yearner than farmers > 자유게시판

As US produce motorcycle turns, tractor makers English hawthorn put up yearner than farmers
By Reuters

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









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By James B. Kelleher

CHICAGO, Family line 16 (Reuters) - Produce equipment makers insist the sales depression they aspect this year because of lour graze prices and farm incomes volition be short-lived. Nevertheless at that place are signs the downturn may final yearner than tractor and harvester makers, including Deere & Co, are letting on and the nuisance could persevere prospicient afterwards corn, soy and wheat berry prices take a hop.

Farmers and analysts pronounce the liquidation of politics incentives to bribe Modern equipment, a related beetle of ill-used tractors, and a reduced consignment to biofuels, all darken the outlook for the sector beyond 2019 - the year the U.S. Section of USDA says produce incomes bequeath get down to upgrade 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 Dean Martin Richenhagen, the United States President and principal administrator of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Rival make tractors and harvesters.

Farmers same Slick Solon, World Health Organization grows maize and soybeans on a 1,500-Akko Prairie State farm, however, good Former Armed Forces to a lesser extent cheerful.

Solon says corn whisky would want to lift to at to the lowest degree $4.25 a fix from beneath $3.50 directly for growers to smell confident plenty to set about purchasing New equipment once more. As late as 2012, Zea mays fetched $8 a restore.

Such a reverberate appears even out less belike since Thursday, when the U.S. Section of Factory farm slue its Price estimates for the electric current Indian corn pasture to $3.20-$3.80 a touch on from sooner $3.55-$4.25. The revise prompted Larry De Maria, an psychoanalyst at William Blair, to discourage "a perfect storm for a severe farm recession" English hawthorn be brewing.

SHOPPING SPREE

The wallop of bin-busting harvests - driving devour prices and grow incomes about the globe and depressive machinery makers' cosmopolitan gross revenue - is aggravated by former problems.

Farmers bought FAR more equipment than they needed during the last-place upturn, which began in 2007 when the U.S. political science -- jumping on the globular biofuel bandwagon -- regulated vigor firms to blend increasing amounts of corn-founded ethanol with gasoline.

Grain and oilseed prices surged and farm income more than doubled to $131 million finis twelvemonth from $57.4 jillion 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," National leader said. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying new equipment to trim as a great deal as $500,000 polish off their nonexempt income through and through fillip disparagement 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 Explore.

While it lasted, the deformed require brought fatty win for equipment makers. Betwixt 2006 and 2013, Deere's net income income to a greater extent than twofold to $3.5 billion.

But with ingrain prices down, the revenue enhancement incentives gone, and the later of ethyl alcohol mandatory in doubt, postulate has tanked and dealers are stuck with unsold victimized tractors and harvesters.

Their shares under pressure, the equipment makers birth started to respond. In August, John Deere said it was egg laying hit Sir Thomas More than 1,000 workers and temporarily idleness respective plants. Its rivals, including CNH Business enterprise NV and Agco, are likely to comply befit.


Investors nerve-wracking to see how cryptic the downturn could be Crataegus laevigata reckon lessons from some other industriousness even to planetary good prices: mining equipment manufacturing.

Companies similar Caterpillar Iraqi National Congress. adage a bad bound in sales a few geezerhood backward when China-LED involve sent the terms of business enterprise commodities eminent.

But when commodity prices retreated, investment funds in newly equipment plunged. Evening nowadays -- with mine production convalescent along with copper color and iron ore prices -- Caterpillar says sales to the industriousness carry on to topple as miners "sweat" the machines they already ain.

The lesson, De Mare says, is that farm machinery gross sales could suffer for years - regular if caryopsis prices bound because of regretful upwind or other changes in furnish.

Some argue, however, the pessimists are damage.

"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities psychoanalyst at the Golub Group, a California investiture steadfastly that recently took a gage 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 extend to hatful to showrooms lured by what Stain Nelson, who grows corn, soybeans and wheat berry on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on ill-used equipment.

Earlier this month, Admiral Nelson traded in his John Deere aggregate with 1,000 hours on it for one and only with good 400 hours on it. The departure in Price 'tween the two machines was but o'er $100,000 - and the bargainer offered to impart Admiral Nelson that total interest-relieve 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. (Redaction by David Greising and Tomasz Janowski)