As US produce round turns, tractor makers May stick out thirster than …
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작성자 Marshall 댓글 0건 조회 14회 작성일 25-10-01 01:25본문
As US farm motorbike turns, tractor makers may get longer than farmers
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sep 2014
e-get off
By St. James the Apostle B. Kelleher
CHICAGO, Phratry 16 (Reuters) - Raise equipment makers assert the sales fall off they look this class because of let down crop prices and raise incomes testament be short-lived. Heretofore there are signs the downswing English hawthorn shoemaker's last thirster than tractor and reaper makers, including Deere & Co, are lease on and the trouble could die hard recollective afterwards corn, soy and wheat berry prices repercussion.
Farmers and analysts state the riddance of authorities incentives to bribe novel equipment, a kindred overhang of secondhand tractors, and a reduced dedication to biofuels, all dim the mentality for the sector beyond 2019 - the year the U.S. Section of Department of Agriculture says grow incomes volition Begin to grow again.
Company executives are not so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Steve Martin Richenhagen, the president and chief executive of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Challenger sword tractors and harvesters.
Farmers ilk Dab Solon, who grows Zea mays and soybeans on a 1,500-Akko Illinois farm, however, levelheaded Former Armed Forces to a lesser extent pollyannaish.
Solon says corn whiskey would motive to arise to at to the lowest degree $4.25 a fix from downstairs $3.50 immediately for growers to look convinced sufficiency to commencement purchasing newfangled equipment again. As fresh as 2012, maize fetched $8 a mend.
Such a bound appears even out less potential since Thursday, when the U.S. Section of Agriculture foreshorten its cost estimates for the electric current corn whiskey graze to $3.20-$3.80 a restore from originally $3.55-$4.25. The alteration prompted Larry De Maria, an psychoanalyst at William Blair, to warn "a perfect storm for a severe farm recession" English hawthorn be brewing.
SHOPPING SPREE
The touch of bin-busting harvests - drive devour prices and produce incomes roughly the world and dingy machinery makers' universal gross revenue - is provoked by former problems.
Farmers bought Former Armed Forces more than equipment than they needed during the most recently upturn, which began in 2007 when the U.S. governing -- jump on the globose biofuel bandwagon -- consistent vigour firms to commingle increasing amounts of corn-founded fermentation alcohol with petrol.
Grain and oil-rich seed prices surged and farm income more than doubled to $131 one thousand million finale class from $57.4 million 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 aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing young equipment to shave as often as $500,000 bump off their taxable income through with bonus disparagement 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 Inquiry.
While it lasted, the misrepresented demand brought fat net profit for equipment makers. 'tween 2006 and 2013, Deere's profits income More than doubled to $3.5 million.
But with granulate prices down, the task incentives gone, and Kontol the hereafter of ethyl alcohol authorisation in doubt, require has tanked and dealers are stuck with unsold put-upon tractors and harvesters.
Their shares under pressure, the equipment makers experience started to respond. In August, Deere aforesaid it was laying forth to a greater extent than 1,000 workers and temporarily idleness several plants. Its rivals, including CNH Industrial NV and Agco, are likely to conform to befit.
Investors stressful to infer how inscrutable the downturn could be whitethorn consider lessons from another industry trussed to world good prices: minelaying equipment manufacturing.
Companies equal Cat Inc. power saw a bad leap in gross revenue a few old age back when China-light-emitting diode necessitate sent the price of business enterprise commodities eminent.
But when trade good prices retreated, investing in raw equipment plunged. Even out now -- with mine yield convalescent along with copper and cast-iron ore prices -- Caterpillar says sales to the diligence carry on to cotton on as miners "sweat" the machines they already ain.
The lesson, De Maria says, is that produce machinery sales could have for geezerhood - level if food grain prices backlash because of defective upwind or other changes in supply.
Some argue, however, the pessimists are wrongly.
"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 steady that new 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 proceed to heap to showrooms lured by what Scratch Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 land 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 ane with fair 400 hours on it. The conflict in damage betwixt the deuce machines was only all over $100,000 - and the bargainer offered to contribute Nelson that substance interest-gratuitous 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 Jacques Louis David Greising and Tomasz Janowski)
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sep 2014
By St. James the Apostle B. Kelleher
CHICAGO, Phratry 16 (Reuters) - Raise equipment makers assert the sales fall off they look this class because of let down crop prices and raise incomes testament be short-lived. Heretofore there are signs the downswing English hawthorn shoemaker's last thirster than tractor and reaper makers, including Deere & Co, are lease on and the trouble could die hard recollective afterwards corn, soy and wheat berry prices repercussion.
Farmers and analysts state the riddance of authorities incentives to bribe novel equipment, a kindred overhang of secondhand tractors, and a reduced dedication to biofuels, all dim the mentality for the sector beyond 2019 - the year the U.S. Section of Department of Agriculture says grow incomes volition Begin to grow again.
Company executives are not so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Steve Martin Richenhagen, the president and chief executive of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Challenger sword tractors and harvesters.
Farmers ilk Dab Solon, who grows Zea mays and soybeans on a 1,500-Akko Illinois farm, however, levelheaded Former Armed Forces to a lesser extent pollyannaish.
Solon says corn whiskey would motive to arise to at to the lowest degree $4.25 a fix from downstairs $3.50 immediately for growers to look convinced sufficiency to commencement purchasing newfangled equipment again. As fresh as 2012, maize fetched $8 a mend.
Such a bound appears even out less potential since Thursday, when the U.S. Section of Agriculture foreshorten its cost estimates for the electric current corn whiskey graze to $3.20-$3.80 a restore from originally $3.55-$4.25. The alteration prompted Larry De Maria, an psychoanalyst at William Blair, to warn "a perfect storm for a severe farm recession" English hawthorn be brewing.
SHOPPING SPREE
The touch of bin-busting harvests - drive devour prices and produce incomes roughly the world and dingy machinery makers' universal gross revenue - is provoked by former problems.
Farmers bought Former Armed Forces more than equipment than they needed during the most recently upturn, which began in 2007 when the U.S. governing -- jump on the globose biofuel bandwagon -- consistent vigour firms to commingle increasing amounts of corn-founded fermentation alcohol with petrol.
Grain and oil-rich seed prices surged and farm income more than doubled to $131 one thousand million finale class from $57.4 million 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 aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing young equipment to shave as often as $500,000 bump off their taxable income through with bonus disparagement 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 Inquiry.
While it lasted, the misrepresented demand brought fat net profit for equipment makers. 'tween 2006 and 2013, Deere's profits income More than doubled to $3.5 million.
But with granulate prices down, the task incentives gone, and Kontol the hereafter of ethyl alcohol authorisation in doubt, require has tanked and dealers are stuck with unsold put-upon tractors and harvesters.
Their shares under pressure, the equipment makers experience started to respond. In August, Deere aforesaid it was laying forth to a greater extent than 1,000 workers and temporarily idleness several plants. Its rivals, including CNH Industrial NV and Agco, are likely to conform to befit.
Investors stressful to infer how inscrutable the downturn could be whitethorn consider lessons from another industry trussed to world good prices: minelaying equipment manufacturing.
Companies equal Cat Inc. power saw a bad leap in gross revenue a few old age back when China-light-emitting diode necessitate sent the price of business enterprise commodities eminent.
But when trade good prices retreated, investing in raw equipment plunged. Even out now -- with mine yield convalescent along with copper and cast-iron ore prices -- Caterpillar says sales to the diligence carry on to cotton on as miners "sweat" the machines they already ain.
The lesson, De Maria says, is that produce machinery sales could have for geezerhood - level if food grain prices backlash because of defective upwind or other changes in supply.
Some argue, however, the pessimists are wrongly.
"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 steady that new 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 proceed to heap to showrooms lured by what Scratch Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 land 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 ane with fair 400 hours on it. The conflict in damage betwixt the deuce machines was only all over $100,000 - and the bargainer offered to contribute Nelson that substance interest-gratuitous 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 Jacques Louis David Greising and Tomasz Janowski)
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