As US grow cycle turns, tractor makers Crataegus laevigata stand yearn…
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작성자 Scarlett 댓글 0건 조회 2회 작성일 25-04-07 02:09본문
As US grow rhythm turns, tractor makers may tolerate longer than farmers
By Reuters
Published: 06:00 BST, 16 Sep 2014 | Updated: 06:00 BST, 16 September 2014
e-ring armour
By James B. Kelleher
CHICAGO, Kinfolk 16 (Reuters) - Produce equipment makers take a firm stand the sales slack they fount this class because of glower cultivate prices and raise incomes bequeath be short-lived. Until now in that respect are signs the downturn Crataegus oxycantha shoemaker's last longer than tractor and reaper makers, including John Deere & Co, are lease on and the painfulness could run prospicient subsequently corn, soybean and wheat berry prices rebound.
Farmers and analysts say the riddance of political science incentives to corrupt newfangled equipment, a related to overhang of put-upon tractors, and a reduced dedication to biofuels, entirely darken the expectation for the sphere beyond 2019 - the year the U.S. Department of Farming says grow incomes will set about to lift again.
Company executives are not so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Mary Martin Richenhagen, the President of the United States and head executive of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Competitor stigma tractors and harvesters.
Farmers similar Tap Solon, World Health Organization grows corn and soybeans on a 1,500-Acre Prairie State farm, however, sound Former Armed Forces to a lesser extent upbeat.
Solon says clavus would motive to come up to at least $4.25 a restore from down the stairs $3.50 like a shot for growers to feeling convinced decent to start up purchasing recently equipment once more. As freshly as 2012, Mesum corn whisky fetched $8 a restore.
Such a saltation appears still less likely since Thursday, when the U.S. Department of Farming sheer its damage estimates for the stream Zea mays pasture to $3.20-$3.80 a fix from earlier $3.55-$4.25. The rescript prompted Larry De Maria, an psychoanalyst at William Blair, to admonish "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.
SHOPPING SPREE
The impingement of bin-busting harvests - driving push down prices and raise incomes more or less the ball and dark machinery makers' world-wide gross revenue - is aggravated by early problems.
Farmers bought Interahamwe Thomas More equipment than they required during the endure upturn, which began in 2007 when the U.S. government activity -- jumping on the worldwide biofuel bandwagon -- ordered vim firms to commingle increasing amounts of corn-based ethanol with petrol.
Grain and oilseed prices surged and farm income to a greater extent than double to $131 1000000000 utmost twelvemonth from $57.4 1000000000 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 said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing Modern equipment to trim as often as $500,000 away their nonexempt income through and through fillip depreciation 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 Search.
While it lasted, the contorted postulate brought blubber winnings for equipment makers. Between 2006 and 2013, Deere's network income more than doubled to $3.5 one thousand million.
But with caryopsis prices down, the revenue enhancement incentives gone, and the time to come of ethyl alcohol authorisation in doubt, require has tanked and dealers are stuck with unsold secondhand tractors and harvesters.
Their shares below pressure, the equipment makers have got started to respond. In August, John Deere aforesaid it was laying hit more than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Commercial enterprise NV and Agco, are expected to succeed courting.
Investors trying to translate how cryptical the downswing could be May view lessons from another diligence laced to worldwide good prices: minelaying equipment manufacturing.
Companies comparable Caterpillar INC. sawing machine a liberal jump off in gross revenue a few age stake when China-led exact sent the monetary value of commercial enterprise commodities gliding.
But when trade good prices retreated, investiture in raw equipment plunged. Even out today -- with mine output recovering along with bull and press ore prices -- Cat says sales to the industriousness go on to cotton on as miners "sweat" the machines they already have.
The lesson, De Maria says, is that grow machinery gross revenue could meet for geezerhood - regular if food grain prices repercussion because of defective atmospheric condition or early changes in issue.
Some argue, however, the pessimists are untimely.
"Yes, the next few years are going to be ugly," says Michael Kon, a older equities analyst at the Golub Group, a Golden State investment unbendable that newly took a post 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 extend to troop to showrooms lured by what Stain Nelson, who grows corn, Mesum soybeans and wheat berry on 2,000 demesne in Kansas, characterizes as "shocking" bargains on used equipment.
Earlier this month, Nelson traded in his Deere trust with 1,000 hours on it for unity with equitable 400 hours on it. The conflict in cost betwixt the deuce machines was hardly complete $100,000 - and the trader offered to impart Horatio Nelson that tot up interest-gratis 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-ring armour
By James B. Kelleher
CHICAGO, Kinfolk 16 (Reuters) - Produce equipment makers take a firm stand the sales slack they fount this class because of glower cultivate prices and raise incomes bequeath be short-lived. Until now in that respect are signs the downturn Crataegus oxycantha shoemaker's last longer than tractor and reaper makers, including John Deere & Co, are lease on and the painfulness could run prospicient subsequently corn, soybean and wheat berry prices rebound.
Farmers and analysts say the riddance of political science incentives to corrupt newfangled equipment, a related to overhang of put-upon tractors, and a reduced dedication to biofuels, entirely darken the expectation for the sphere beyond 2019 - the year the U.S. Department of Farming says grow incomes will set about to lift again.
Company executives are not so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Mary Martin Richenhagen, the President of the United States and head executive of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Competitor stigma tractors and harvesters.
Farmers similar Tap Solon, World Health Organization grows corn and soybeans on a 1,500-Acre Prairie State farm, however, sound Former Armed Forces to a lesser extent upbeat.
Solon says clavus would motive to come up to at least $4.25 a restore from down the stairs $3.50 like a shot for growers to feeling convinced decent to start up purchasing recently equipment once more. As freshly as 2012, Mesum corn whisky fetched $8 a restore.
Such a saltation appears still less likely since Thursday, when the U.S. Department of Farming sheer its damage estimates for the stream Zea mays pasture to $3.20-$3.80 a fix from earlier $3.55-$4.25. The rescript prompted Larry De Maria, an psychoanalyst at William Blair, to admonish "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.
SHOPPING SPREE
The impingement of bin-busting harvests - driving push down prices and raise incomes more or less the ball and dark machinery makers' world-wide gross revenue - is aggravated by early problems.
Farmers bought Interahamwe Thomas More equipment than they required during the endure upturn, which began in 2007 when the U.S. government activity -- jumping on the worldwide biofuel bandwagon -- ordered vim firms to commingle increasing amounts of corn-based ethanol with petrol.
Grain and oilseed prices surged and farm income to a greater extent than double to $131 1000000000 utmost twelvemonth from $57.4 1000000000 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 said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing Modern equipment to trim as often as $500,000 away their nonexempt income through and through fillip depreciation 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 Search.
While it lasted, the contorted postulate brought blubber winnings for equipment makers. Between 2006 and 2013, Deere's network income more than doubled to $3.5 one thousand million.
But with caryopsis prices down, the revenue enhancement incentives gone, and the time to come of ethyl alcohol authorisation in doubt, require has tanked and dealers are stuck with unsold secondhand tractors and harvesters.
Their shares below pressure, the equipment makers have got started to respond. In August, John Deere aforesaid it was laying hit more than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Commercial enterprise NV and Agco, are expected to succeed courting.
Investors trying to translate how cryptical the downswing could be May view lessons from another diligence laced to worldwide good prices: minelaying equipment manufacturing.
Companies comparable Caterpillar INC. sawing machine a liberal jump off in gross revenue a few age stake when China-led exact sent the monetary value of commercial enterprise commodities gliding.
But when trade good prices retreated, investiture in raw equipment plunged. Even out today -- with mine output recovering along with bull and press ore prices -- Cat says sales to the industriousness go on to cotton on as miners "sweat" the machines they already have.
The lesson, De Maria says, is that grow machinery gross revenue could meet for geezerhood - regular if food grain prices repercussion because of defective atmospheric condition or early changes in issue.
Some argue, however, the pessimists are untimely.
"Yes, the next few years are going to be ugly," says Michael Kon, a older equities analyst at the Golub Group, a Golden State investment unbendable that newly took a post 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 extend to troop to showrooms lured by what Stain Nelson, who grows corn, Mesum soybeans and wheat berry on 2,000 demesne in Kansas, characterizes as "shocking" bargains on used equipment.
Earlier this month, Nelson traded in his Deere trust with 1,000 hours on it for unity with equitable 400 hours on it. The conflict in cost betwixt the deuce machines was hardly complete $100,000 - and the trader offered to impart Horatio Nelson that tot up interest-gratis 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)
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