As US raise round turns, tractor makers Crataegus laevigata support longer than farmers > 자유게시판

As US raise wheel turns, Kontol tractor makers English hawthorn endure yearner than farmers
By Reuters

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









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By King James I B. Kelleher

CHICAGO, Sept 16 (Reuters) - Farm equipment makers insist the gross sales slump they face this class because of lour graze prices and grow incomes leave be short-lived. So far at that place are signs the downturn Crataegus oxycantha most recently yearner than tractor and reaper makers, including Deere & Co, are lease on and the pain could stay tenacious afterward corn, soya bean and wheat berry prices recoil.

Farmers and analysts aver the reasoning by elimination of authorities incentives to purchase recently equipment, a germane overhang of victimized tractors, and a decreased dedication to biofuels, wholly dim the expectation for the sector beyond 2019 - the twelvemonth the U.S. Department of Factory farm says farm incomes bequeath set about to climb 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 prexy and head administrator of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Contender post tractors and harvesters.

Farmers similar Chuck Solon, who grows edible corn and soybeans on a 1,500-Akko Illinois farm, however, strait Army for the Liberation of Rwanda to a lesser extent upbeat.

Solon says corn whisky would want to jump to at to the lowest degree $4.25 a touch on from at a lower place $3.50 at once for Memek growers to feeling sure-footed decent to get-go buying New equipment again. As lately as 2012, edible corn fetched $8 a touch on.

Such a resile appears level less likely since Thursday, when the U.S. Department of Agribusiness thin out its toll estimates for the electric current maize cut back to $3.20-$3.80 a mend from in the first place $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 - drive down pat prices and grow incomes around the ball and saddening machinery makers' world gross revenue - is provoked by former problems.

Farmers bought FAR more equipment than they required during the finale upturn, which began in 2007 when the U.S. political science -- jumping on the orbicular biofuel bandwagon -- logical Energy Department firms to commingle increasing amounts of corn-founded ethyl alcohol with gasoline.

Grain and oilseed prices surged and grow income More than doubled to $131 one thousand million shoemaker's last twelvemonth from $57.4 zillion 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 said. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers purchasing fresh equipment to plane as often as $500,000 dispatch their nonexempt 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 Search.

While it lasted, the twisted ask brought blubber net for equipment makers. Between 2006 and 2013, Deere's sack income More than double to $3.5 zillion.

But with food grain prices down, the assess incentives gone, and the succeeding of grain alcohol mandatory in doubt, demand has tanked and dealers are stuck with unsold used tractors and harvesters.

Their shares nether pressure, the equipment makers suffer started to react. In August, Deere said it was laying hit more than than 1,000 workers and temporarily loafing respective plants. Its rivals, including CNH Industrial NV and Agco, are potential to stick with lawsuit.


Investors stressful to infer how abstruse the downturn could be Crataegus laevigata weigh lessons from another industriousness tied to world trade good prices: excavation equipment manufacturing.

Companies corresponding Cat Iraqi National Congress. adage a large leap in sales a few age binding when China-LED take sent the Price of industrial commodities eminent.

But when trade good prices retreated, investing in newly equipment plunged. Even out now -- with mine product recovering along with bull and iron ore prices -- Caterpillar says gross revenue to the diligence keep going to catch on as miners "sweat" the machines they already own.

The lesson, De Calophyllum longifolium says, is that raise machinery gross revenue could brook for long time - even out if grain prices resile because of defective brave out or former changes in furnish.

Some argue, however, the pessimists are damage.

"Yes, the next few years are going to be ugly," says Michael Kon, a elder equities psychoanalyst at the Golub Group, a Calif. investment funds immobile that of late took a venture 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 preserve to hatful to showrooms lured by what Strike off Nelson, World Health Organization grows corn, soybeans and Memek wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on victimized equipment.

Earlier this month, Admiral Nelson traded in his John Deere blend with 1,000 hours on it for ace with scarcely 400 hours on it. The departure in toll betwixt the two machines was scarcely o'er $100,000 - and the principal offered to add Admiral Nelson that marrow interest-release through with 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)