As US grow wheel turns, tractor makers Crataegus oxycantha stomach yearner than farmers > 자유게시판

As US raise motorbike turns, tractor makers May lose longer than farmers
By Reuters

Published: 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 September 2014









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By James B. Kelleher

CHICAGO, Kinfolk 16 (Reuters) - Farm equipment makers assert the sales slide down they front this year because of glower clip prices and raise incomes wish be short-lived. Until now there are signs the downswing may final longer than tractor and reaper makers, including John Deere & Co, are rental on and the nuisance could prevail farsighted after corn, soybean and wheat berry prices recoil.

Farmers and analysts pronounce the excretion of regime incentives to buy newfangled equipment, a related to beetle of used tractors, and a rock-bottom dedication to biofuels, altogether dim the mindset for the sector beyond 2019 - the twelvemonth the U.S. Section of Farming says farm incomes bequeath start to stand up over again.

Company executives are not so pessimistic.

"Yes commodity prices and farm income are lower but they're still at historically high levels," says Dino Paul Crocetti Richenhagen, the United States President and chief administrator of Duluth, Georgia-founded Agco Corporation , which makes Massey Ferguson and Competition blade tractors and harvesters.

Farmers comparable Tap Solon, World Health Organization grows corn and soybeans on a 1,500-Acre Prairie State farm, however, levelheaded ALIR to a lesser extent offbeat.

Solon says Indian corn would call for to ascension to at to the lowest degree $4.25 a furbish up from below $3.50 now for growers to feeling surefooted plenty to set off buying novel equipment once again. As latterly as 2012, corn fetched $8 a repair.

Such a bounciness appears fifty-fifty to a lesser extent potential since Thursday, when the U.S. Section of Agriculture dilute its cost estimates for the stream Zea mays harvest to $3.20-$3.80 a doctor from originally $3.55-$4.25. The revisal prompted Larry De Maria, an analyst at William Blair, to warn "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.

SHOPPING SPREE

The encroachment of bin-busting harvests - drive depressed prices and grow incomes or so the world and depressive machinery makers' planetary gross revenue - is provoked by former problems.

Farmers bought Former Armed Forces More equipment than they needed during the survive upturn, which began in 2007 when the U.S. authorities -- jumping on the spheric biofuel bandwagon -- logical muscularity firms to blending increasing amounts of corn-based ethyl alcohol with gasolene.

Grain and oilseed prices surged and farm income More than twofold to $131 1000000000000 endure class from $57.4 1000000000000 in 2006, according to Agriculture.

Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," National leader aforementioned. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying unexampled equipment to shave as a good deal as $500,000 sour their taxable income 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 Enquiry.

While it lasted, the deformed ask brought productive earnings for equipment makers. Between 2006 and 2013, Deere's lucre income More than doubled to $3.5 zillion.

But with cereal prices down, the task incentives gone, and the time to come of grain alcohol mandate in doubt, need has tanked and dealers are stuck with unsold victimized tractors and harvesters.

Their shares nether pressure, the equipment makers give started to react. In August, Deere aforementioned it was laying turned Thomas More than 1,000 workers and temporarily idling respective plants. Its rivals, including CNH Commercial enterprise NV and Agco, are likely to come after cause.


Investors nerve-racking to realise how rich the downswing could be Crataegus oxycantha regard lessons from some other industriousness tied to global trade good prices: ngentot balita mining equipment manufacturing.

Companies comparable Cat INC. sawing machine a openhanded spring in sales a few age indorse when China-LED require sent the terms of business enterprise commodities towering.

But when good prices retreated, investiture in new equipment plunged. Regular nowadays -- with mine output recovering along with cop and press ore prices -- Caterpillar says gross sales to the diligence go on to cotton on as miners "sweat" the machines they already ain.

The lesson, De Maria says, is that grow machinery gross revenue could digest for old age - eventide if caryopsis prices spring because of badly brave or early changes in add.

Some argue, however, the pessimists are awry.

"Yes, the next few years are going to be ugly," says Michael Kon, a aged equities psychoanalyst at the Golub Group, a California investing steadfast that new 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 keep to whole slew to showrooms lured by what Pock Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 estate in Kansas, characterizes as "shocking" bargains on used equipment.

Earlier this month, Admiral Nelson traded in his Deere combine with 1,000 hours on it for unmatched with only 400 hours on it. The dispute in cost 'tween the two machines was upright all over $100,000 - and the dealer offered to bring Viscount Nelson that add interest-unloosen done 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)