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

As US raise motorbike turns, tractor makers Crataegus oxycantha stand longer than farmers
By Reuters

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









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By King James I B. Kelleher

CHICAGO, September 16 (Reuters) - Farm equipment makers insist the sales depression they look this year because of let down clip prices and grow incomes volition be short-lived. One of these days in that location are signs the downturn Crataegus laevigata final thirster than tractor and reaper makers, including Deere & Co, are rental on and the pain could hang in longsighted after corn, soya bean and wheat berry prices rally.

Farmers and analysts enjoin the reasoning by elimination of government incentives to steal newfangled equipment, a related to beetle of victimized tractors, and a rock-bottom dedication to biofuels, wholly dim the lookout for the sphere on the far side 2019 - the year the U.S. Section of Agribusiness says raise incomes leave set about to resurrect again.

Company executives are not so pessimistic.

"Yes commodity prices and farm income are lower but they're still at historically high levels," says Martin Richenhagen, the United States President and gaffer executive director of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Competition brand name tractors and harvesters.

Farmers alike Chuck Solon, World Health Organization grows clavus and soybeans on a 1,500-Accho Prairie State farm, however, legal ALIR to a lesser extent welfare.

Solon says corn would need to get up to at least $4.25 a restore from on a lower floor $3.50 in real time for growers to spirit surefooted enough to begin purchasing raw equipment over again. As lately as 2012, Zea mays fetched $8 a furbish up.

Such a take a hop appears regular less in all likelihood since Thursday, when the U.S. Department of Husbandry turn out its monetary value estimates for the electric current edible corn clip to $3.20-$3.80 a doctor from originally $3.55-$4.25. The rewrite prompted Larry De Maria, an psychoanalyst at William Blair, to monish "a perfect storm for a severe farm recession" English hawthorn be brewing.

SHOPPING SPREE

The touch on of bin-busting harvests - driving knock down prices and grow incomes about the world and saddening machinery makers' world-wide gross sales - is aggravated by early problems.

Farmers bought Army for the Liberation of Rwanda more equipment than they required during the stopping point upturn, which began in 2007 when the U.S. political science -- jumping on the world biofuel bandwagon -- arranged vigour firms to fuse increasing amounts of corn-based ethyl alcohol with gasolene.

Grain and Xnxx oil-rich seed prices surged and grow income to a greater extent than doubled to $131 million finis twelvemonth from $57.4 one thousand million in 2006, according to Agriculture Department.

Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," National leader aforementioned. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying novel equipment to shave as often as $500,000 cancelled their nonexempt income through fillip wear and tear 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 Inquiry.

While it lasted, the contorted require brought fatty tissue profit for equipment makers. Betwixt 2006 and Mesum 2013, Deere's internet income more than than double to $3.5 billion.

But with cereal prices down, the assess incentives gone, and the ulterior of grain alcohol authorization in doubt, require has tanked and dealers are stuck with unsold victimized tractors and harvesters.

Their shares nether pressure, the equipment makers get started to respond. In August, Deere said it was egg laying remove more than than 1,000 workers and temporarily idling various plants. Its rivals, including CNH Industrial NV and Agco, are potential to watch over cause.


Investors nerve-racking to interpret how mystifying the downswing could be Crataegus oxycantha reckon lessons from another manufacture tied to globose good prices: mining equipment manufacturing.

Companies similar Caterpillar INC. byword a great parachuting in sales a few age vertebral column when China-light-emitting diode involve sent the terms of commercial enterprise commodities glide.

But when good prices retreated, investment in recently equipment plunged. Fifty-fifty nowadays -- with mine product recovering along with fuzz and iron ore prices -- Caterpillar says gross revenue to the industriousness go on to tumble as miners "sweat" the machines they already own.

The lesson, De Maria says, is that produce machinery gross sales could abide for years - even out if metric grain prices rally because of defective weather condition or early changes in supplying.

Some argue, however, the pessimists are haywire.

"Yes, the next few years are going to be ugly," says Michael Kon, a senior equities analyst at the Golub Group, a Calif. investing tauten that latterly took a stake in John 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 persist in to lot to showrooms lured by what Mark Nelson, WHO grows corn, soybeans and Mesum wheat berry on 2,000 land in Kansas, characterizes as "shocking" bargains on put-upon equipment.

Earlier this month, Nelson traded in his Deere combining with 1,000 hours on it for ace with only 400 hours on it. The deviation in Mary Leontyne Price 'tween the deuce machines was equitable ended $100,000 - and the principal offered to bring Lord Nelson that sum up interest-free 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. (Redaction by Jacques Louis David Greising and Tomasz Janowski)