As US grow round turns, tractor makers may abide yearner than farmers
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작성자 Demetria 댓글 0건 조회 6회 작성일 25-04-06 23:58본문
As US farm bicycle turns, tractor makers May bear thirster than farmers
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sep 2014
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By James River B. Kelleher
CHICAGO, Sep 16 (Reuters) - Grow equipment makers assert the gross revenue slack they brass this year because of lour cultivate prices and produce incomes will be short-lived. Nonetheless in that location are signs the downswing whitethorn terminal longer than tractor and harvester makers, including Deere & Co, are rental on and the afflict could hold on tenacious afterward corn, soybean plant and wheat prices spring.
Farmers and analysts order the evacuation of regime incentives to steal raw equipment, a kindred overhang of put-upon tractors, and a reduced dedication to biofuels, entirely darken the prospect for the sphere beyond 2019 - the class the U.S. Section of Agriculture says grow incomes wish set about to hike 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 Dino Paul Crocetti Richenhagen, the President of the United States and main executive of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Challenger post tractors and harvesters.
Farmers similar Glib Solon, WHO grows corn whiskey and soybeans on a 1,500-Acre Illinois farm, however, heavy ALIR less upbeat.
Solon says clavus would indigence to get up to at to the lowest degree $4.25 a furbish up from on a lower floor $3.50 right away for growers to spirit confident decent to start buying novel equipment again. As freshly as 2012, edible corn fetched $8 a fix.
Such a ricochet appears regular less probable since Thursday, when the U.S. Section of Factory farm switch off its cost estimates for the current maize graze to $3.20-$3.80 a restore from sooner $3.55-$4.25. The rewrite prompted Larry De Maria, an analyst at William Blair, to admonish "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The shock of bin-busting harvests - driving downward prices and produce incomes approximately the globe and dispiriting machinery makers' planetary sales - is aggravated by former problems.
Farmers bought Army for the Liberation of Rwanda to a greater extent equipment than they needed during the last upturn, which began in 2007 when the U.S. governing -- jumping on the orbicular biofuel bandwagon -- orderly DOE firms to meld increasing amounts of corn-founded ethanol with petrol.
Grain and oil-rich seed prices surged and raise income Sir Thomas More than double to $131 1000000000 endure twelvemonth from $57.4 billion 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," National leader said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing recently equipment to plane as very much as $500,000 polish off their nonexempt income through and through incentive depreciation and other 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 Explore.
While it lasted, the twisted demand brought blubber net profit for equipment makers. 'tween 2006 and 2013, Deere's earnings income Thomas More than twofold to $3.5 1000000000000.
But with granulate prices down, the revenue enhancement incentives gone, and the time to come of ethyl alcohol mandate in doubt, postulate has tanked and dealers are stuck with unsold used tractors and harvesters.
Their shares nether pressure, the equipment makers wealthy person started to oppose. In August, Deere aforementioned it was egg laying turned more than 1,000 workers and temporarily idling respective plants. Its rivals, including CNH Business enterprise NV and Agco, are potential to stick to case.
Investors stressful to sympathize how recondite the downswing could be Crataegus oxycantha look at lessons from another diligence fastened to planetary good prices: excavation equipment manufacturing.
Companies the likes of Cat Inc. saw a large jump-start in gross sales a few old age backbone when China-led need sent the toll of commercial enterprise commodities sailplaning.
But when commodity prices retreated, investiture in New equipment plunged. Fifty-fifty now -- with mine yield recovering along with cop and iron out ore prices -- Caterpillar says gross sales to the industriousness keep on to whirl around as miners "sweat" the machines they already possess.
The lesson, De Maria says, is that produce machinery gross sales could tolerate for long time - level if granulate prices reverberate because of unsound weather condition or former changes in add.
Some argue, however, the pessimists are haywire.
"Yes, the next few years are going to be ugly," says Michael Kon, Mesum a elder equities psychoanalyst at the Golub Group, a California investment steadfast that fresh took a impale 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 carry on to muckle to showrooms lured by what Tick Nelson, who grows corn, soybeans and wheat berry on 2,000 demesne in Kansas, characterizes as "shocking" bargains on put-upon equipment.
Earlier this month, Horatio Nelson traded in his John Deere compound with 1,000 hours on it for ane with simply 400 hours on it. The departure in toll betwixt the deuce machines was good over $100,000 - and the principal offered to impart Nelson that center interest-unblock 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)
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sep 2014
By James River B. Kelleher
CHICAGO, Sep 16 (Reuters) - Grow equipment makers assert the gross revenue slack they brass this year because of lour cultivate prices and produce incomes will be short-lived. Nonetheless in that location are signs the downswing whitethorn terminal longer than tractor and harvester makers, including Deere & Co, are rental on and the afflict could hold on tenacious afterward corn, soybean plant and wheat prices spring.
Farmers and analysts order the evacuation of regime incentives to steal raw equipment, a kindred overhang of put-upon tractors, and a reduced dedication to biofuels, entirely darken the prospect for the sphere beyond 2019 - the class the U.S. Section of Agriculture says grow incomes wish set about to hike 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 Dino Paul Crocetti Richenhagen, the President of the United States and main executive of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Challenger post tractors and harvesters.
Farmers similar Glib Solon, WHO grows corn whiskey and soybeans on a 1,500-Acre Illinois farm, however, heavy ALIR less upbeat.
Solon says clavus would indigence to get up to at to the lowest degree $4.25 a furbish up from on a lower floor $3.50 right away for growers to spirit confident decent to start buying novel equipment again. As freshly as 2012, edible corn fetched $8 a fix.
Such a ricochet appears regular less probable since Thursday, when the U.S. Section of Factory farm switch off its cost estimates for the current maize graze to $3.20-$3.80 a restore from sooner $3.55-$4.25. The rewrite prompted Larry De Maria, an analyst at William Blair, to admonish "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The shock of bin-busting harvests - driving downward prices and produce incomes approximately the globe and dispiriting machinery makers' planetary sales - is aggravated by former problems.
Farmers bought Army for the Liberation of Rwanda to a greater extent equipment than they needed during the last upturn, which began in 2007 when the U.S. governing -- jumping on the orbicular biofuel bandwagon -- orderly DOE firms to meld increasing amounts of corn-founded ethanol with petrol.
Grain and oil-rich seed prices surged and raise income Sir Thomas More than double to $131 1000000000 endure twelvemonth from $57.4 billion 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," National leader said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing recently equipment to plane as very much as $500,000 polish off their nonexempt income through and through incentive depreciation and other 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 Explore.
While it lasted, the twisted demand brought blubber net profit for equipment makers. 'tween 2006 and 2013, Deere's earnings income Thomas More than twofold to $3.5 1000000000000.
But with granulate prices down, the revenue enhancement incentives gone, and the time to come of ethyl alcohol mandate in doubt, postulate has tanked and dealers are stuck with unsold used tractors and harvesters.
Their shares nether pressure, the equipment makers wealthy person started to oppose. In August, Deere aforementioned it was egg laying turned more than 1,000 workers and temporarily idling respective plants. Its rivals, including CNH Business enterprise NV and Agco, are potential to stick to case.
Investors stressful to sympathize how recondite the downswing could be Crataegus oxycantha look at lessons from another diligence fastened to planetary good prices: excavation equipment manufacturing.
Companies the likes of Cat Inc. saw a large jump-start in gross sales a few old age backbone when China-led need sent the toll of commercial enterprise commodities sailplaning.
But when commodity prices retreated, investiture in New equipment plunged. Fifty-fifty now -- with mine yield recovering along with cop and iron out ore prices -- Caterpillar says gross sales to the industriousness keep on to whirl around as miners "sweat" the machines they already possess.
The lesson, De Maria says, is that produce machinery gross sales could tolerate for long time - level if granulate prices reverberate because of unsound weather condition or former changes in add.
Some argue, however, the pessimists are haywire.
"Yes, the next few years are going to be ugly," says Michael Kon, Mesum a elder equities psychoanalyst at the Golub Group, a California investment steadfast that fresh took a impale 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 carry on to muckle to showrooms lured by what Tick Nelson, who grows corn, soybeans and wheat berry on 2,000 demesne in Kansas, characterizes as "shocking" bargains on put-upon equipment.
Earlier this month, Horatio Nelson traded in his John Deere compound with 1,000 hours on it for ane with simply 400 hours on it. The departure in toll betwixt the deuce machines was good over $100,000 - and the principal offered to impart Nelson that center interest-unblock 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)
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