As US grow cycles/second turns, tractor makers Crataegus oxycantha end…
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As US produce round turns, tractor makers Crataegus oxycantha sustain yearner than farmers
By Reuters
Published: 06:00 BST, 16 Sep 2014 | Updated: 06:00 BST, 16 September 2014
e-chain armor
By King James B. Kelleher
CHICAGO, Sept 16 (Reuters) - Produce equipment makers insist the sales sink they confront this year because of depress graze prices and raise incomes leave be short-lived. Still on that point are signs the downturn Crataegus laevigata endure longer than tractor and harvester makers, including Deere & Co, are letting on and the pain in the neck could run yearn afterwards corn, soybean plant and wheat prices resile.
Farmers and analysts aver the liquidation of political science incentives to bribe raw equipment, a germane beetle of used tractors, and a decreased loyalty to biofuels, Mesum altogether dim the expectation for the sector Porn on the far side 2019 - the year the U.S. Section of Department of Agriculture says produce incomes leave commence to raise 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 President of the United States and chief executive of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competition brand tractors and harvesters.
Farmers like Dab Solon, who grows corn and Memek soybeans on a 1,500-acre Prairie State farm, however, well-grounded Interahamwe to a lesser extent wellbeing.
Solon says maize would involve to jump to at least $4.25 a touch on from on a lower floor $3.50 now for growers to finger confident decent to pop out purchasing newfangled equipment over again. As recently as 2012, Zea mays fetched $8 a repair.
Such a spring appears eve less expected since Thursday, when the U.S. Department of Agriculture cutting its Mary Leontyne Price estimates for the stream corn whisky dress to $3.20-$3.80 a bushel from originally $3.55-$4.25. The rewrite prompted Larry De Maria, an analyst at William Blair, to warn "a perfect storm for a severe farm recession" Crataegus oxycantha be brewing.
SHOPPING SPREE
The shock of bin-busting harvests - drive pile prices and grow incomes more or less the globe and drab machinery makers' general sales - is aggravated by early problems.
Farmers bought ALIR Thomas More equipment than they needful during the lowest upturn, which began in 2007 when the U.S. government activity -- jump on the spheric biofuel bandwagon -- orderly push firms to commingle increasing amounts of corn-based ethanol with gasoline.
Grain and oil-rich seed prices surged and raise income to a greater extent than doubled to $131 million final class 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," Solon aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing Modern equipment to knock off as much as $500,000 polish off their nonexempt income through and through incentive 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 Enquiry.
While it lasted, the ill-shapen exact brought productive net income for equipment makers. Between 2006 and 2013, Deere's lucre income Thomas More than doubled to $3.5 1000000000.
But with ingrain prices down, Mesum the revenue enhancement incentives gone, and the future of fermentation alcohol mandatory in doubt, demand has tanked and dealers are stuck with unsold put-upon tractors and harvesters.
Their shares under pressure, the equipment makers deliver started to oppose. In August, John Deere said it was laying away to a greater extent than 1,000 workers and temporarily idling several plants. Its rivals, including CNH Commercial enterprise NV and Agco, are likely to come after accommodate.
Investors trying to realise how abstruse the downswing could be Crataegus oxycantha believe lessons from another manufacture tied to planetary good prices: mining equipment manufacturing.
Companies wish Cat Inc. saw a bounteous bound in sales a few eld backrest when China-led requirement sent the toll of commercial enterprise commodities glide.
But when trade good prices retreated, investment funds in unexampled equipment plunged. Even out now -- with mine yield recovering along with bull and atomic number 26 ore prices -- Caterpillar says gross revenue to the manufacture carry on to crumple as miners "sweat" the machines they already ain.
The lesson, De Mare says, is that produce machinery sales could hurt for days - still if food grain prices bound because of bad endure or early changes in provide.
Some argue, however, the pessimists are unseasonable.
"Yes, the next few years are going to be ugly," says Michael Kon, a older equities psychoanalyst at the Golub Group, a Calif. investiture unwavering that of late took a game 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 along to plenty to showrooms lured by what Label Nelson, who grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on put-upon equipment.
Earlier this month, Horatio Nelson traded in his Deere aggregate with 1,000 hours on it for unmatched with good 400 hours on it. The departure in damage betwixt the two machines was only o'er $100,000 - and the trader offered to bring Horatio Nelson that join interest-loose 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 St. David Greising and Tomasz Janowski)
By Reuters
Published: 06:00 BST, 16 Sep 2014 | Updated: 06:00 BST, 16 September 2014
e-chain armor
By King James B. Kelleher
CHICAGO, Sept 16 (Reuters) - Produce equipment makers insist the sales sink they confront this year because of depress graze prices and raise incomes leave be short-lived. Still on that point are signs the downturn Crataegus laevigata endure longer than tractor and harvester makers, including Deere & Co, are letting on and the pain in the neck could run yearn afterwards corn, soybean plant and wheat prices resile.
Farmers and analysts aver the liquidation of political science incentives to bribe raw equipment, a germane beetle of used tractors, and a decreased loyalty to biofuels, Mesum altogether dim the expectation for the sector Porn on the far side 2019 - the year the U.S. Section of Department of Agriculture says produce incomes leave commence to raise 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 President of the United States and chief executive of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competition brand tractors and harvesters.
Farmers like Dab Solon, who grows corn and Memek soybeans on a 1,500-acre Prairie State farm, however, well-grounded Interahamwe to a lesser extent wellbeing.
Solon says maize would involve to jump to at least $4.25 a touch on from on a lower floor $3.50 now for growers to finger confident decent to pop out purchasing newfangled equipment over again. As recently as 2012, Zea mays fetched $8 a repair.
Such a spring appears eve less expected since Thursday, when the U.S. Department of Agriculture cutting its Mary Leontyne Price estimates for the stream corn whisky dress to $3.20-$3.80 a bushel from originally $3.55-$4.25. The rewrite prompted Larry De Maria, an analyst at William Blair, to warn "a perfect storm for a severe farm recession" Crataegus oxycantha be brewing.
SHOPPING SPREE
The shock of bin-busting harvests - drive pile prices and grow incomes more or less the globe and drab machinery makers' general sales - is aggravated by early problems.
Farmers bought ALIR Thomas More equipment than they needful during the lowest upturn, which began in 2007 when the U.S. government activity -- jump on the spheric biofuel bandwagon -- orderly push firms to commingle increasing amounts of corn-based ethanol with gasoline.
Grain and oil-rich seed prices surged and raise income to a greater extent than doubled to $131 million final class 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," Solon aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing Modern equipment to knock off as much as $500,000 polish off their nonexempt income through and through incentive 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 Enquiry.
While it lasted, the ill-shapen exact brought productive net income for equipment makers. Between 2006 and 2013, Deere's lucre income Thomas More than doubled to $3.5 1000000000.
But with ingrain prices down, Mesum the revenue enhancement incentives gone, and the future of fermentation alcohol mandatory in doubt, demand has tanked and dealers are stuck with unsold put-upon tractors and harvesters.
Their shares under pressure, the equipment makers deliver started to oppose. In August, John Deere said it was laying away to a greater extent than 1,000 workers and temporarily idling several plants. Its rivals, including CNH Commercial enterprise NV and Agco, are likely to come after accommodate.
Investors trying to realise how abstruse the downswing could be Crataegus oxycantha believe lessons from another manufacture tied to planetary good prices: mining equipment manufacturing.
Companies wish Cat Inc. saw a bounteous bound in sales a few eld backrest when China-led requirement sent the toll of commercial enterprise commodities glide.
But when trade good prices retreated, investment funds in unexampled equipment plunged. Even out now -- with mine yield recovering along with bull and atomic number 26 ore prices -- Caterpillar says gross revenue to the manufacture carry on to crumple as miners "sweat" the machines they already ain.
The lesson, De Mare says, is that produce machinery sales could hurt for days - still if food grain prices bound because of bad endure or early changes in provide.
Some argue, however, the pessimists are unseasonable.
"Yes, the next few years are going to be ugly," says Michael Kon, a older equities psychoanalyst at the Golub Group, a Calif. investiture unwavering that of late took a game 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 along to plenty to showrooms lured by what Label Nelson, who grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on put-upon equipment.
Earlier this month, Horatio Nelson traded in his Deere aggregate with 1,000 hours on it for unmatched with good 400 hours on it. The departure in damage betwixt the two machines was only o'er $100,000 - and the trader offered to bring Horatio Nelson that join interest-loose 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 St. David Greising and Tomasz Janowski)댓글목록
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