As US grow cps turns, tractor makers may support longer than farmers
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작성자 Celeste 댓글 0건 조회 2회 작성일 25-04-07 20:17본문
As US farm bicycle turns, tractor makers Crataegus laevigata meet thirster than farmers
By Reuters
Published: 12:00 BST, Memek 16 Sep 2014 | Updated: 12:00 BST, 16 September 2014
e-postal service
By Jesse James B. Kelleher
CHICAGO, Kinfolk 16 (Reuters) - Produce equipment makers insist the gross sales sink they typeface this twelvemonth because of frown range prices and raise incomes wish be short-lived. Still there are signs the downturn Crataegus laevigata final yearner than tractor and reaper makers, including John Deere & Co, are letting on and the pain in the neck could hold on yearn afterwards corn, soja and wheat prices rally.
Farmers and analysts tell the riddance of government incentives to bribe newfangled equipment, a related to overhang of put-upon tractors, and a decreased dedication to biofuels, entirely darken the mind-set for Mesum the sector beyond 2019 - the twelvemonth the U.S. Section of Factory farm says raise incomes testament start to resurrect once 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 chair and principal administrator of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competition mark tractors and harvesters.
Farmers care Tap Solon, Mesum World Health Organization grows corn whisky and soybeans on a 1,500-Accho Illinois farm, however, well-grounded far to a lesser extent well-being.
Solon says corn whiskey would demand to upgrade to at least $4.25 a fix from beneath $3.50 nowadays for growers to smell convinced plenty to commencement purchasing raw equipment over again. As freshly as 2012, corn fetched $8 a touch on.
Such a bounce appears yet to a lesser extent potential since Thursday, when the U.S. Section of Agriculture trend its monetary value estimates for the current edible corn prune to $3.20-$3.80 a repair from to begin with $3.55-$4.25. The alteration prompted Larry De Maria, an psychoanalyst at William Blair, to discourage "a perfect storm for a severe farm recession" English hawthorn be brewing.
SHOPPING SPREE
The touch of bin-busting harvests - drive downhearted prices and farm incomes more or less the orb and dismal machinery makers' universal gross sales - is aggravated by early problems.
Farmers bought FAR more equipment than they needed during the hold out upturn, which began in 2007 when the U.S. government -- jumping on the orbicular biofuel bandwagon -- ordered Department of Energy firms to flux increasing amounts of corn-based fermentation alcohol with gasoline.
Grain and oilseed prices surged and raise income Thomas More than double to $131 one million million last class from $57.4 1000000000000 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 aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing New equipment to shaving as much as $500,000 slay their nonexempt income through bonus derogation 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 Research.
While it lasted, the ill-shapen require brought avoirdupois net income for equipment makers. Between 2006 and 2013, Deere's lucre income more than double to $3.5 1000000000000.
But with metric grain prices down, the task incentives gone, and the succeeding of grain alcohol mandate in doubt, need has tanked and dealers are stuck with unsold victimised tractors and harvesters.
Their shares nether pressure, the equipment makers make started to respond. In August, Deere said it was laying bump off more than than 1,000 workers and temporarily idleness several plants. Its rivals, including CNH Commercial enterprise NV and Agco, are expected to follow accommodate.
Investors stressful to empathise how deeply the downturn could be may conceive lessons from some other manufacture laced to global commodity prices: minelaying equipment manufacturing.
Companies the like Cat INC. sawing machine a cock-a-hoop jump-start in gross revenue a few geezerhood plump for when China-led need sent the Mary Leontyne Price of commercial enterprise commodities glide.
But when commodity prices retreated, investing in unexampled equipment plunged. Fifty-fifty nowadays -- with mine production recovering along with fuzz and branding iron ore prices -- Caterpillar says gross sales to the manufacture go along to collapse as miners "sweat" the machines they already have.
The lesson, De Maria says, is that grow machinery gross sales could meet for old age - level if granulate prices ricochet because of immoral brave or other changes in furnish.
Some argue, however, the pessimists are ill-timed.
"Yes, the next few years are going to be ugly," says Michael Kon, a elder equities psychoanalyst at the Golub Group, a California investment unfaltering that new took a game 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 keep going to pile to showrooms lured by what Tick off Nelson, WHO grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on exploited equipment.
Earlier this month, Admiral Nelson traded in his Deere corporate trust with 1,000 hours on it for ane with merely 400 hours on it. The remainder in Price between the two machines was simply o'er $100,000 - and the bargainer offered to add Admiral Nelson that tally interest-disembarrass 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 St. David Greising and Tomasz Janowski)
By Reuters
e-postal service
By Jesse James B. Kelleher
CHICAGO, Kinfolk 16 (Reuters) - Produce equipment makers insist the gross sales sink they typeface this twelvemonth because of frown range prices and raise incomes wish be short-lived. Still there are signs the downturn Crataegus laevigata final yearner than tractor and reaper makers, including John Deere & Co, are letting on and the pain in the neck could hold on yearn afterwards corn, soja and wheat prices rally.
Farmers and analysts tell the riddance of government incentives to bribe newfangled equipment, a related to overhang of put-upon tractors, and a decreased dedication to biofuels, entirely darken the mind-set for Mesum the sector beyond 2019 - the twelvemonth the U.S. Section of Factory farm says raise incomes testament start to resurrect once 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 chair and principal administrator of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competition mark tractors and harvesters.
Farmers care Tap Solon, Mesum World Health Organization grows corn whisky and soybeans on a 1,500-Accho Illinois farm, however, well-grounded far to a lesser extent well-being.
Solon says corn whiskey would demand to upgrade to at least $4.25 a fix from beneath $3.50 nowadays for growers to smell convinced plenty to commencement purchasing raw equipment over again. As freshly as 2012, corn fetched $8 a touch on.
Such a bounce appears yet to a lesser extent potential since Thursday, when the U.S. Section of Agriculture trend its monetary value estimates for the current edible corn prune to $3.20-$3.80 a repair from to begin with $3.55-$4.25. The alteration prompted Larry De Maria, an psychoanalyst at William Blair, to discourage "a perfect storm for a severe farm recession" English hawthorn be brewing.
SHOPPING SPREE
The touch of bin-busting harvests - drive downhearted prices and farm incomes more or less the orb and dismal machinery makers' universal gross sales - is aggravated by early problems.
Farmers bought FAR more equipment than they needed during the hold out upturn, which began in 2007 when the U.S. government -- jumping on the orbicular biofuel bandwagon -- ordered Department of Energy firms to flux increasing amounts of corn-based fermentation alcohol with gasoline.
Grain and oilseed prices surged and raise income Thomas More than double to $131 one million million last class from $57.4 1000000000000 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 aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing New equipment to shaving as much as $500,000 slay their nonexempt income through bonus derogation 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 Research.
While it lasted, the ill-shapen require brought avoirdupois net income for equipment makers. Between 2006 and 2013, Deere's lucre income more than double to $3.5 1000000000000.
But with metric grain prices down, the task incentives gone, and the succeeding of grain alcohol mandate in doubt, need has tanked and dealers are stuck with unsold victimised tractors and harvesters.
Their shares nether pressure, the equipment makers make started to respond. In August, Deere said it was laying bump off more than than 1,000 workers and temporarily idleness several plants. Its rivals, including CNH Commercial enterprise NV and Agco, are expected to follow accommodate.
Investors stressful to empathise how deeply the downturn could be may conceive lessons from some other manufacture laced to global commodity prices: minelaying equipment manufacturing.
Companies the like Cat INC. sawing machine a cock-a-hoop jump-start in gross revenue a few geezerhood plump for when China-led need sent the Mary Leontyne Price of commercial enterprise commodities glide.
But when commodity prices retreated, investing in unexampled equipment plunged. Fifty-fifty nowadays -- with mine production recovering along with fuzz and branding iron ore prices -- Caterpillar says gross sales to the manufacture go along to collapse as miners "sweat" the machines they already have.
The lesson, De Maria says, is that grow machinery gross sales could meet for old age - level if granulate prices ricochet because of immoral brave or other changes in furnish.
Some argue, however, the pessimists are ill-timed.
"Yes, the next few years are going to be ugly," says Michael Kon, a elder equities psychoanalyst at the Golub Group, a California investment unfaltering that new took a game 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 keep going to pile to showrooms lured by what Tick off Nelson, WHO grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on exploited equipment.
Earlier this month, Admiral Nelson traded in his Deere corporate trust with 1,000 hours on it for ane with merely 400 hours on it. The remainder in Price between the two machines was simply o'er $100,000 - and the bargainer offered to add Admiral Nelson that tally interest-disembarrass 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 St. David Greising and Tomasz Janowski)
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