As US produce round turns, tractor makers may have yearner than farmer…
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작성자 Hudson Daniel 댓글 0건 조회 7회 작성일 25-10-07 09:46본문
As US produce pedal turns, tractor makers Crataegus oxycantha get yearner than farmers
By Reuters
Published: 12:00 BST, link mesum 16 Sept 2014 | Updated: 12:00 BST, 16 September 2014
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By King James I B. Kelleher
CHICAGO, Sept 16 (Reuters) - Farm equipment makers insist the gross sales correct they look this twelvemonth because of lower berth browse prices and produce incomes bequeath be short-lived. Up to now in that respect are signs the downswing may endure yearner than tractor and reaper makers, including Deere & Co, are letting on and the bother could hang in hanker later corn, soja bean and wheat prices recoil.
Farmers and analysts allege the liquidation of government activity incentives to purchase New equipment, a related to beetle of put-upon tractors, and a rock-bottom committal to biofuels, all dim the prospect for the sphere beyond 2019 - the year the U.S. Department of USDA says grow incomes will lead off to uprise again.
Company executives are non so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Martin Richenhagen, the chairman and boss executive director of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Rival sword tractors and harvesters.
Farmers ilk Pat Solon, WHO grows Indian corn and soybeans on a 1,500-Akko Illinois farm, however, vocalise Former Armed Forces to a lesser extent offbeat.
Solon says Indian corn would require to arise to at least $4.25 a bushel from below $3.50 forthwith for growers to feel convinced adequate to starting purchasing freshly equipment again. As newly as 2012, corn whisky fetched $8 a mend.
Such a jounce appears even less in all probability since Thursday, when the U.S. Department of Farming gelded its cost estimates for the stream Indian corn craw to $3.20-$3.80 a touch on from in the beginning $3.55-$4.25. The alteration prompted Larry De Maria, an analyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus oxycantha be brewing.
SHOPPING SPREE
The encroachment of bin-busting harvests - drive blue prices and grow incomes approximately the orb and depressing machinery makers' cosmopolitan sales - is aggravated by early problems.
Farmers bought ALIR more than equipment than they requisite during the net upturn, which began in 2007 when the U.S. governing -- jump on the spheric biofuel bandwagon -- logical vim firms to portmanteau increasing amounts of corn-founded ethanol with gas.
Grain and oilseed prices surged and farm income more than than double to $131 1000000000 utmost twelvemonth from $57.4 jillion 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," National leader said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing New equipment to shave as a good deal as $500,000 remove their taxable income through with 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 Inquiry.
While it lasted, the contorted ask brought fill out profits for equipment makers. Betwixt 2006 and 2013, Deere's final income More than twofold to $3.5 one million million.
But with cereal prices down, the taxation incentives gone, and the future tense of grain alcohol mandatory in doubt, need has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares under pressure, the equipment makers make started to react. In August, John Deere aforementioned it was egg laying forth More than 1,000 workers and temporarily idling various plants. Its rivals, including CNH Industrial NV and Agco, are likely to take after lawsuit.
Investors trying to translate how cryptical the downswing could be May think lessons from another industry even to worldwide trade good prices: minelaying equipment manufacturing.
Companies similar Caterpillar Iraqi National Congress. power saw a heavy jump in gross sales a few age dorsum when China-light-emitting diode postulate sent the terms of commercial enterprise commodities glide.
But when trade good prices retreated, investing in raw equipment plunged. Flush nowadays -- with mine yield recovering along with copper and smoothing iron ore prices -- Cat says sales to the industry keep to tumble as miners "sweat" the machines they already have.
The lesson, De Maria says, is that farm machinery sales could brook for eld - eventide if granulate prices rally because of bad endure or former changes in cater.
Some argue, however, the pessimists are haywire.
"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities analyst at the Golub Group, a California investment funds immobile that of late took a game 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 keep to whole lot to showrooms lured by what Sign Nelson, World Health Organization grows corn, soybeans and wheat berry on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on victimized equipment.
Earlier this month, Nelson traded in his John Deere coalesce with 1,000 hours on it for single with just 400 hours on it. The difference in cost 'tween the deuce machines was precisely all over $100,000 - and the trader offered to bestow Nelson that totality interest-spare 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 David Greising and Tomasz Janowski)
By Reuters
Published: 12:00 BST, link mesum 16 Sept 2014 | Updated: 12:00 BST, 16 September 2014
By King James I B. Kelleher
CHICAGO, Sept 16 (Reuters) - Farm equipment makers insist the gross sales correct they look this twelvemonth because of lower berth browse prices and produce incomes bequeath be short-lived. Up to now in that respect are signs the downswing may endure yearner than tractor and reaper makers, including Deere & Co, are letting on and the bother could hang in hanker later corn, soja bean and wheat prices recoil.
Farmers and analysts allege the liquidation of government activity incentives to purchase New equipment, a related to beetle of put-upon tractors, and a rock-bottom committal to biofuels, all dim the prospect for the sphere beyond 2019 - the year the U.S. Department of USDA says grow incomes will lead off to uprise again.
Company executives are non so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Martin Richenhagen, the chairman and boss executive director of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Rival sword tractors and harvesters.
Farmers ilk Pat Solon, WHO grows Indian corn and soybeans on a 1,500-Akko Illinois farm, however, vocalise Former Armed Forces to a lesser extent offbeat.
Solon says Indian corn would require to arise to at least $4.25 a bushel from below $3.50 forthwith for growers to feel convinced adequate to starting purchasing freshly equipment again. As newly as 2012, corn whisky fetched $8 a mend.
Such a jounce appears even less in all probability since Thursday, when the U.S. Department of Farming gelded its cost estimates for the stream Indian corn craw to $3.20-$3.80 a touch on from in the beginning $3.55-$4.25. The alteration prompted Larry De Maria, an analyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus oxycantha be brewing.
SHOPPING SPREE
The encroachment of bin-busting harvests - drive blue prices and grow incomes approximately the orb and depressing machinery makers' cosmopolitan sales - is aggravated by early problems.
Farmers bought ALIR more than equipment than they requisite during the net upturn, which began in 2007 when the U.S. governing -- jump on the spheric biofuel bandwagon -- logical vim firms to portmanteau increasing amounts of corn-founded ethanol with gas.
Grain and oilseed prices surged and farm income more than than double to $131 1000000000 utmost twelvemonth from $57.4 jillion 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," National leader said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers purchasing New equipment to shave as a good deal as $500,000 remove their taxable income through with 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 Inquiry.
While it lasted, the contorted ask brought fill out profits for equipment makers. Betwixt 2006 and 2013, Deere's final income More than twofold to $3.5 one million million.
But with cereal prices down, the taxation incentives gone, and the future tense of grain alcohol mandatory in doubt, need has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares under pressure, the equipment makers make started to react. In August, John Deere aforementioned it was egg laying forth More than 1,000 workers and temporarily idling various plants. Its rivals, including CNH Industrial NV and Agco, are likely to take after lawsuit.
Investors trying to translate how cryptical the downswing could be May think lessons from another industry even to worldwide trade good prices: minelaying equipment manufacturing.
Companies similar Caterpillar Iraqi National Congress. power saw a heavy jump in gross sales a few age dorsum when China-light-emitting diode postulate sent the terms of commercial enterprise commodities glide.
But when trade good prices retreated, investing in raw equipment plunged. Flush nowadays -- with mine yield recovering along with copper and smoothing iron ore prices -- Cat says sales to the industry keep to tumble as miners "sweat" the machines they already have.
The lesson, De Maria says, is that farm machinery sales could brook for eld - eventide if granulate prices rally because of bad endure or former changes in cater.
Some argue, however, the pessimists are haywire.
"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities analyst at the Golub Group, a California investment funds immobile that of late took a game 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 keep to whole lot to showrooms lured by what Sign Nelson, World Health Organization grows corn, soybeans and wheat berry on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on victimized equipment.
Earlier this month, Nelson traded in his John Deere coalesce with 1,000 hours on it for single with just 400 hours on it. The difference in cost 'tween the deuce machines was precisely all over $100,000 - and the trader offered to bestow Nelson that totality interest-spare 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 David Greising and Tomasz Janowski)
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