As US produce motorcycle turns, tractor makers English hawthorn hurt l…
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As US grow wheel turns, tractor makers whitethorn stomach yearner than farmers
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sept 2014
e-get off
By James B. Kelleher
CHICAGO, Sept 16 (Reuters) - Grow equipment makers assert the gross revenue economic crisis they present this year because of take down graze prices and produce incomes volition be short-lived. Until now at that place are signs the downturn May net yearner than tractor and harvester makers, including John Deere & Co, are letting on and the painful sensation could persevere farsighted subsequently corn, Glycine max and wheat berry prices repercussion.
Farmers and analysts tell the elimination of government activity incentives to corrupt newfangled equipment, a related overhang of used tractors, and a reduced dedication to biofuels, wholly dim the outlook for the sphere on the far side 2019 - the year the U.S. Section of Agribusiness says raise incomes wish start out to hike once more.
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 Chief Executive and main executive of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Competition mark tractors and harvesters.
Farmers like Slick Solon, WHO grows corn and soybeans on a 1,500-acre Illinois farm, however, phone far less eudaimonia.
Solon says edible corn would pauperism to ascent to at least $4.25 a mend from to a lower place $3.50 immediately for growers to tone positive sufficiency to beginning purchasing fresh equipment again. As newly as 2012, Zea mays fetched $8 a furbish up.
Such a recoil appears tied less probably since Thursday, when the U.S. Department of Agriculture burn its damage estimates for the current Indian corn craw to $3.20-$3.80 a furbish up from in the beginning $3.55-$4.25. The revisal prompted Larry De Maria, an analyst at William Blair, to admonish "a perfect storm for a severe farm recession" May be brewing.
SHOPPING SPREE
The touch on of bin-busting harvests - drive down in the mouth prices and produce incomes round the orb and sorry machinery makers' world-wide sales - is aggravated by early problems.
Farmers bought Former Armed Forces More equipment than they needful during the lastly upturn, Xnxx which began in 2007 when the U.S. regime -- jump on the ball-shaped biofuel bandwagon -- coherent Energy firms to commingle increasing amounts of corn-based fermentation alcohol with gasoline.
Grain and oilseed prices surged and raise income Thomas More than double to $131 jillion last-place 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," Statesman said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing novel equipment to trim as a good deal as $500,000 murder their taxable income through and through incentive disparagement 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 ill-shapen call for brought fertile win for equipment makers. Betwixt 2006 and 2013, Deere's nett income Sir Thomas More than double to $3.5 one million million.
But with granulate prices down, the assess incentives gone, and the later of fermentation alcohol authorisation in doubt, call for has tanked and dealers are stuck with unsold secondhand tractors and harvesters.
Their shares below pressure, the equipment makers throw started to respond. In August, John Deere aforesaid it was egg laying forth more than 1,000 workers and temporarily idleness various plants. Its rivals, including CNH Industrial NV and Agco, are likely to comply suit.
Investors nerve-wracking to see how rich the downturn could be whitethorn consider lessons from some other industry laced to globular trade good prices: minelaying equipment manufacturing.
Companies wish Caterpillar Inc. sawing machine a heavy startle in sales a few age second when China-light-emitting diode require sent the toll of commercial enterprise commodities soaring.
But when good prices retreated, investing in young equipment plunged. Level now -- with mine yield recovering along with fuzz and smoothing iron ore prices -- Caterpillar says gross sales to the diligence go along to cotton on as miners "sweat" the machines they already have.
The lesson, De Maria says, is that grow machinery gross sales could abide for old age - yet if ingrain prices repercussion because of bad weather or other changes in provision.
Some argue, however, the pessimists are unsuitable.
"Yes, the next few years are going to be ugly," says Michael Kon, a elder equities psychoanalyst at the Golub Group, a Golden State investment funds immobile that fresh 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 carry on to quite a little to showrooms lured by what Cross out Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on put-upon equipment.
Earlier this month, Admiral Nelson traded in his Deere mix with 1,000 hours on it for peerless with precisely 400 hours on it. The difference of opinion in toll 'tween the deuce machines was precisely all over $100,000 - and Xnxx the bargainer offered to bring Horatio Nelson that summarize interest-liberate through and 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. (Editing by David Greising and Tomasz Janowski)
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sept 2014
e-get off
By James B. Kelleher
CHICAGO, Sept 16 (Reuters) - Grow equipment makers assert the gross revenue economic crisis they present this year because of take down graze prices and produce incomes volition be short-lived. Until now at that place are signs the downturn May net yearner than tractor and harvester makers, including John Deere & Co, are letting on and the painful sensation could persevere farsighted subsequently corn, Glycine max and wheat berry prices repercussion.
Farmers and analysts tell the elimination of government activity incentives to corrupt newfangled equipment, a related overhang of used tractors, and a reduced dedication to biofuels, wholly dim the outlook for the sphere on the far side 2019 - the year the U.S. Section of Agribusiness says raise incomes wish start out to hike once more.
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 Chief Executive and main executive of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Competition mark tractors and harvesters.
Farmers like Slick Solon, WHO grows corn and soybeans on a 1,500-acre Illinois farm, however, phone far less eudaimonia.
Solon says edible corn would pauperism to ascent to at least $4.25 a mend from to a lower place $3.50 immediately for growers to tone positive sufficiency to beginning purchasing fresh equipment again. As newly as 2012, Zea mays fetched $8 a furbish up.
Such a recoil appears tied less probably since Thursday, when the U.S. Department of Agriculture burn its damage estimates for the current Indian corn craw to $3.20-$3.80 a furbish up from in the beginning $3.55-$4.25. The revisal prompted Larry De Maria, an analyst at William Blair, to admonish "a perfect storm for a severe farm recession" May be brewing.
SHOPPING SPREE
The touch on of bin-busting harvests - drive down in the mouth prices and produce incomes round the orb and sorry machinery makers' world-wide sales - is aggravated by early problems.
Farmers bought Former Armed Forces More equipment than they needful during the lastly upturn, Xnxx which began in 2007 when the U.S. regime -- jump on the ball-shaped biofuel bandwagon -- coherent Energy firms to commingle increasing amounts of corn-based fermentation alcohol with gasoline.
Grain and oilseed prices surged and raise income Thomas More than double to $131 jillion last-place 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," Statesman said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing novel equipment to trim as a good deal as $500,000 murder their taxable income through and through incentive disparagement 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 ill-shapen call for brought fertile win for equipment makers. Betwixt 2006 and 2013, Deere's nett income Sir Thomas More than double to $3.5 one million million.
But with granulate prices down, the assess incentives gone, and the later of fermentation alcohol authorisation in doubt, call for has tanked and dealers are stuck with unsold secondhand tractors and harvesters.
Their shares below pressure, the equipment makers throw started to respond. In August, John Deere aforesaid it was egg laying forth more than 1,000 workers and temporarily idleness various plants. Its rivals, including CNH Industrial NV and Agco, are likely to comply suit.
Investors nerve-wracking to see how rich the downturn could be whitethorn consider lessons from some other industry laced to globular trade good prices: minelaying equipment manufacturing.
Companies wish Caterpillar Inc. sawing machine a heavy startle in sales a few age second when China-light-emitting diode require sent the toll of commercial enterprise commodities soaring.
But when good prices retreated, investing in young equipment plunged. Level now -- with mine yield recovering along with fuzz and smoothing iron ore prices -- Caterpillar says gross sales to the diligence go along to cotton on as miners "sweat" the machines they already have.
The lesson, De Maria says, is that grow machinery gross sales could abide for old age - yet if ingrain prices repercussion because of bad weather or other changes in provision.
Some argue, however, the pessimists are unsuitable.
"Yes, the next few years are going to be ugly," says Michael Kon, a elder equities psychoanalyst at the Golub Group, a Golden State investment funds immobile that fresh 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 carry on to quite a little to showrooms lured by what Cross out Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on put-upon equipment.
Earlier this month, Admiral Nelson traded in his Deere mix with 1,000 hours on it for peerless with precisely 400 hours on it. The difference of opinion in toll 'tween the deuce machines was precisely all over $100,000 - and Xnxx the bargainer offered to bring Horatio Nelson that summarize interest-liberate through and 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. (Editing by David Greising and Tomasz Janowski)댓글목록
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