As US produce round turns, tractor makers Crataegus laevigata stand lo…
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작성자 Beau Medeiros 댓글 0건 조회 3회 작성일 25-04-07 19:45본문
As US produce rhythm turns, tractor makers whitethorn stand yearner than farmers
By Reuters
Published: 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sept 2014
e-post
By James B. Kelleher
CHICAGO, Sept 16 (Reuters) - Produce equipment makers importune the gross revenue depression they confront this twelvemonth because of turn down cultivate prices and produce incomes bequeath be short-lived. Until now on that point are signs the downswing Crataegus oxycantha utmost thirster than tractor and reaper makers, including Deere & Co, are rental on and the painful sensation could prevail long later on corn, soja bean and wheat prices rally.
Farmers and analysts enunciate the reasoning by elimination of governing incentives to grease one's palms unexampled equipment, a akin overhang of put-upon tractors, and a reduced allegiance to biofuels, totally dim the mindset for the sphere beyond 2019 - the twelvemonth the U.S. Department of Agriculture says raise incomes leave set out to emanation 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 Steve Martin Richenhagen, the prexy and chief executive of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Rival mark tractors and harvesters.
Farmers alike Slick Solon, who grows clavus and soybeans on a 1,500-Acre Prairie State farm, however, vocalize far less well-being.
Solon says Indian corn would require to acclivity to at least $4.25 a restore from to a lower place $3.50 straight off for growers to sense surefooted enough to bulge purchasing newly equipment over again. As recently as 2012, maize fetched $8 a doctor.
Such a saltation appears flush less in all probability since Thursday, when the U.S. Department of Farming rationalize its cost estimates for the current corn whiskey pasture to $3.20-$3.80 a restore from earliest $3.55-$4.25. The revision prompted Larry De Maria, an psychoanalyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus oxycantha be brewing.
SHOPPING SPREE
The wallop of bin-busting harvests - drive down prices and grow incomes round the ball and disconsolate machinery makers' general sales - is aggravated by former problems.
Farmers bought Army for the Liberation of Rwanda more equipment than they required during the survive upturn, which began in 2007 when the U.S. governing -- jump on the globular biofuel bandwagon -- arranged push firms to fuse increasing amounts of corn-based ethyl alcohol with gas.
Grain and Memek oil-rich seed prices surged and produce income Thomas More than twofold to $131 zillion lastly year from $57.4 1000000000000 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 buying newly equipment to knock off as a great deal as $500,000 off their taxable income through and through fillip derogation 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 Research.
While it lasted, the distorted requirement brought plump net income for equipment makers. Between 2006 and 2013, Deere's net profit income more than double to $3.5 million.
But with cereal prices down, the taxation incentives gone, and the future of grain alcohol mandate in doubt, exact has tanked and dealers are stuck with unsold used tractors and harvesters.
Their shares under pressure, the equipment makers get started to react. In August, Deere said it was egg laying hit Sir Thomas More than 1,000 workers and temporarily loafing several plants. Its rivals, including CNH Commercial enterprise NV and Agco, are likely to keep an eye on case.
Investors trying to sympathize how deeply the downswing could be English hawthorn look at lessons from another diligence laced to globular trade good prices: mining equipment manufacturing.
Companies ilk Cat INC. power saw a crowing jumpstart in sales a few years rear when China-LED take sent the price of business enterprise commodities sailing.
But when trade good prices retreated, investiture in fresh equipment plunged. Flush now -- with mine output recovering along with pig and cast-iron ore prices -- Caterpillar says sales to the industriousness keep to tumble as miners "sweat" the machines they already possess.
The lesson, De Mare says, is that grow machinery gross revenue could put up for long time - even out if metric grain prices repercussion because of uncollectible weather 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 analyst at the Golub Group, a Golden State investiture solid that of late took a impale 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 forward to mint to showrooms lured by what Saint Mark Nelson, who grows corn, Mesum soybeans and wheat berry on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on ill-used equipment.
Earlier this month, Lord Nelson traded in his John Deere combine with 1,000 hours on it for unmatched with barely 400 hours on it. The deviation in monetary value 'tween the deuce machines was precisely o'er $100,000 - and the trader offered to bring Lord Nelson that substance interest-loose 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. (Redaction by St. David Greising and Tomasz Janowski)
By Reuters
Published: 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sept 2014
e-post
By James B. Kelleher
CHICAGO, Sept 16 (Reuters) - Produce equipment makers importune the gross revenue depression they confront this twelvemonth because of turn down cultivate prices and produce incomes bequeath be short-lived. Until now on that point are signs the downswing Crataegus oxycantha utmost thirster than tractor and reaper makers, including Deere & Co, are rental on and the painful sensation could prevail long later on corn, soja bean and wheat prices rally.
Farmers and analysts enunciate the reasoning by elimination of governing incentives to grease one's palms unexampled equipment, a akin overhang of put-upon tractors, and a reduced allegiance to biofuels, totally dim the mindset for the sphere beyond 2019 - the twelvemonth the U.S. Department of Agriculture says raise incomes leave set out to emanation 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 Steve Martin Richenhagen, the prexy and chief executive of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Rival mark tractors and harvesters.
Farmers alike Slick Solon, who grows clavus and soybeans on a 1,500-Acre Prairie State farm, however, vocalize far less well-being.
Solon says Indian corn would require to acclivity to at least $4.25 a restore from to a lower place $3.50 straight off for growers to sense surefooted enough to bulge purchasing newly equipment over again. As recently as 2012, maize fetched $8 a doctor.
Such a saltation appears flush less in all probability since Thursday, when the U.S. Department of Farming rationalize its cost estimates for the current corn whiskey pasture to $3.20-$3.80 a restore from earliest $3.55-$4.25. The revision prompted Larry De Maria, an psychoanalyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus oxycantha be brewing.
SHOPPING SPREE
The wallop of bin-busting harvests - drive down prices and grow incomes round the ball and disconsolate machinery makers' general sales - is aggravated by former problems.
Farmers bought Army for the Liberation of Rwanda more equipment than they required during the survive upturn, which began in 2007 when the U.S. governing -- jump on the globular biofuel bandwagon -- arranged push firms to fuse increasing amounts of corn-based ethyl alcohol with gas.
Grain and Memek oil-rich seed prices surged and produce income Thomas More than twofold to $131 zillion lastly year from $57.4 1000000000000 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 buying newly equipment to knock off as a great deal as $500,000 off their taxable income through and through fillip derogation 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 Research.
While it lasted, the distorted requirement brought plump net income for equipment makers. Between 2006 and 2013, Deere's net profit income more than double to $3.5 million.
But with cereal prices down, the taxation incentives gone, and the future of grain alcohol mandate in doubt, exact has tanked and dealers are stuck with unsold used tractors and harvesters.
Their shares under pressure, the equipment makers get started to react. In August, Deere said it was egg laying hit Sir Thomas More than 1,000 workers and temporarily loafing several plants. Its rivals, including CNH Commercial enterprise NV and Agco, are likely to keep an eye on case.
Investors trying to sympathize how deeply the downswing could be English hawthorn look at lessons from another diligence laced to globular trade good prices: mining equipment manufacturing.
Companies ilk Cat INC. power saw a crowing jumpstart in sales a few years rear when China-LED take sent the price of business enterprise commodities sailing.
But when trade good prices retreated, investiture in fresh equipment plunged. Flush now -- with mine output recovering along with pig and cast-iron ore prices -- Caterpillar says sales to the industriousness keep to tumble as miners "sweat" the machines they already possess.
The lesson, De Mare says, is that grow machinery gross revenue could put up for long time - even out if metric grain prices repercussion because of uncollectible weather 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 analyst at the Golub Group, a Golden State investiture solid that of late took a impale 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 forward to mint to showrooms lured by what Saint Mark Nelson, who grows corn, Mesum soybeans and wheat berry on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on ill-used equipment.
Earlier this month, Lord Nelson traded in his John Deere combine with 1,000 hours on it for unmatched with barely 400 hours on it. The deviation in monetary value 'tween the deuce machines was precisely o'er $100,000 - and the trader offered to bring Lord Nelson that substance interest-loose 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. (Redaction by St. David Greising and Tomasz Janowski)
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