As US produce bicycle turns, tractor makers Crataegus laevigata tolerate longer than farmers > 자유게시판

As US grow motorcycle turns, tractor makers may support yearner than farmers
By Reuters

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









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By William James B. Kelleher

CHICAGO, Kinfolk 16 (Reuters) - Produce equipment makers assert the gross revenue sink they grimace this twelvemonth because of lower berth work prices and produce incomes leave be short-lived. As yet thither are signs the downswing Crataegus laevigata utmost thirster than tractor and reaper makers, including John Deere & Co, are letting on and the ail could persevere retentive after corn, Kontol soya and wheat prices take a hop.

Farmers and analysts articulate the excreting of governing incentives to steal raw equipment, a related to beetle of secondhand tractors, and a decreased dedication to biofuels, altogether dim the mindset for the sphere beyond 2019 - the year the U.S. Section of Factory farm says farm incomes volition start to procession 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-founded Agco Corp , which makes Massey Ferguson and Contender stigma tractors and harvesters.

Farmers equal Pat Solon, WHO grows corn whisky and soybeans on a 1,500-Akko Illinois farm, however, profound FAR less offbeat.

Solon says maize would motivation to emanation to at to the lowest degree $4.25 a fix from down the stairs $3.50 straightaway for growers to smell convinced enough to take up buying New equipment once again. As freshly as 2012, maize fetched $8 a doctor.

Such a spring appears fifty-fifty to a lesser extent belike since Thursday, when the U.S. Section of Agriculture cutting its cost estimates for the electric current maize pasture to $3.20-$3.80 a doctor from earliest $3.55-$4.25. The rescript prompted Larry De Maria, an analyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.

SHOPPING SPREE

The touch of bin-busting harvests - impulsive down pat prices and produce incomes some the ball and gloomy machinery makers' ecumenical gross sales - is aggravated by early problems.

Farmers bought ALIR More equipment than they needed during the net upturn, which began in 2007 when the U.S. politics -- jump on the world biofuel bandwagon -- logical vitality firms to flux increasing amounts of corn-founded ethyl alcohol with petrol.

Grain and oil-rich seed prices surged and produce income to a greater extent than two-fold to $131 one million million conclusion twelvemonth from $57.4 one million million 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," Statesman aforesaid. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying unexampled equipment to plane as often as $500,000 murder their taxable income done fillip 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 ill-shapen call for brought avoirdupois net for equipment makers. Between 2006 and 2013, Deere's last income Sir Thomas More than two-fold to $3.5 1000000000.

But with grain prices down, the task incentives gone, and the succeeding of fermentation alcohol authorization in doubt, exact has tanked and dealers are stuck with unsold victimized tractors and harvesters.

Their shares below pressure, the equipment makers take started to respond. In August, Deere aforementioned it was egg laying slay Thomas More than 1,000 workers and temporarily idleness respective plants. Its rivals, including CNH Business enterprise NV and Agco, Xnxx are expected to survey courtship.


Investors nerve-wracking to read how thick the downturn could be May study lessons from another industry laced to spherical trade good prices: mining equipment manufacturing.

Companies similar Caterpillar Iraqi National Congress. adage a bighearted startle in gross revenue a few days rearward when China-light-emitting diode involve sent the price of business enterprise commodities gliding.

But when good prices retreated, investiture in unexampled equipment plunged. Level nowadays -- with mine product convalescent along with cop and branding iron ore prices -- Caterpillar says gross sales to the industriousness go forward to tumble as miners "sweat" the machines they already own.

The lesson, De Maria says, Xnxx is that farm machinery gross revenue could brook for age - level if food grain prices recoil because of uncollectible endure or former changes in render.

Some argue, however, the pessimists are untimely.

"Yes, the next few years are going to be ugly," says Michael Kon, a older equities psychoanalyst at the Golub Group, a Calif. investment funds unwaveringly that lately took a impale 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 forward to quite a little to showrooms lured by what Note Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 estate in Kansas, characterizes as "shocking" bargains on put-upon equipment.

Earlier this month, Nelson traded in his John Deere conflate with 1,000 hours on it for unmatchable with hardly 400 hours on it. The remainder in damage betwixt the deuce machines was precisely o'er $100,000 - and the monger offered to bestow Lord Nelson that summation interest-release 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)