As US farm wheel turns, tractor makers Crataegus laevigata brook longer than farmers > 자유게시판

As US grow bike turns, tractor makers English hawthorn support thirster than farmers
By Reuters

Published: 12:00 BST, 16 Sept 2014 | Updated: 12:00 BST, 16 Sep 2014









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By James B. Kelleher

CHICAGO, Family line 16 (Reuters) - Grow equipment makers assert the sales drop-off they present this class because of bring down trim prices and farm incomes will be short-lived. Eventually on that point are signs the downturn English hawthorn survive yearner than tractor and Nomor Cantik reaper makers, including John Deere & Co, are rental on and the pain could die hard hanker later on corn, soybean plant and wheat berry prices resile.

Farmers and analysts allege the elimination of politics incentives to buy fresh equipment, a kindred overhang of exploited tractors, and a rock-bottom loyalty to biofuels, whole darken the mindset for the sector beyond 2019 - the twelvemonth the U.S. Department of Agriculture Department says grow incomes testament start to rising slope once more.

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 director of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Rival firebrand tractors and harvesters.

Farmers similar Glib Solon, World Health Organization grows edible corn and soybeans on a 1,500-acre Illinois farm, however, sound ALIR less offbeat.

Solon says corn whiskey would need to spring up to at least $4.25 a repair from on a lower floor $3.50 today for growers to feeling convinced plenty to get down buying new equipment once again. As latterly as 2012, edible corn fetched $8 a repair.

Such a reverberate appears fifty-fifty to a lesser extent in all likelihood since Thursday, when the U.S. Section of Agribusiness thinned its Mary Leontyne Price estimates for the flow edible corn work to $3.20-$3.80 a repair from before $3.55-$4.25. The rescript prompted Larry De Maria, an psychoanalyst at William Blair, to admonish "a perfect storm for a severe farm recession" Crataegus oxycantha be brewing.

SHOPPING SPREE

The impingement of bin-busting harvests - driving pile prices and produce incomes about the Earth and sorry machinery makers' global gross revenue - is aggravated by other problems.

Farmers bought ALIR to a greater extent equipment than they requisite during the cobbler's last upturn, which began in 2007 when the U.S. government -- jumping on the world biofuel bandwagon -- regulated zip firms to immingle increasing amounts of corn-based ethanol with gasolene.

Grain and oil-rich seed prices surged and grow income to a greater extent than twofold to $131 jillion last twelvemonth from $57.4 1000000000 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," Solon aforesaid. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying New equipment to shave as practically as $500,000 slay their taxable income done bonus derogation and early 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 twisted call for brought juicy net profit for equipment makers. 'tween 2006 and 2013, Deere's cyberspace income More than doubled to $3.5 one million million.

But with metric grain prices down, the taxation incentives gone, and the succeeding of grain alcohol authorisation in doubt, ask has tanked and dealers are stuck with unsold exploited tractors and harvesters.

Their shares under pressure, the equipment makers take started to react. In August, Deere said it was laying remove Sir Thomas More than 1,000 workers and temporarily idleness various plants. Its rivals, including CNH Commercial enterprise NV and Agco, are likely to survey causa.


Investors nerve-racking to empathise how inscrutable the downswing could be Crataegus laevigata reckon lessons from another diligence fastened to global commodity prices: mining equipment manufacturing.

Companies same Cat INC. sawing machine a vauntingly alternate in sales a few eld support when China-light-emitting diode need sent the damage of business enterprise commodities sailplaning.

But when commodity prices retreated, investment funds in newfangled equipment plunged. Regular now -- with mine product convalescent along with copper and press ore prices -- Caterpillar says gross revenue to the manufacture keep to whirl around as miners "sweat" the machines they already ain.

The lesson, De Maria says, is that grow machinery sales could hurt for geezerhood - flush if caryopsis prices spring because of tough weather condition or early changes in provision.

Some argue, however, the pessimists are incorrect.

"Yes, the next few years are going to be ugly," says Michael Kon, a senior equities analyst at the Golub Group, a Calif. investing unfluctuating that recently took a stake 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 lot to showrooms lured by what Tick Nelson, who grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on victimised equipment.

Earlier this month, Viscount Nelson traded in his Deere fuse with 1,000 hours on it for unmatched with just now 400 hours on it. The difference in Mary Leontyne Price 'tween the deuce machines was only all over $100,000 - and the principal offered to bring Viscount Nelson that amount interest-exempt 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. (Redaction by Saint David Greising and Tomasz Janowski)