As US grow bike turns, tractor makers may endure thirster than farmers
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작성자 Layla 댓글 0건 조회 125회 작성일 25-10-22 15:54본문
As US farm wheel turns, tractor makers may bear thirster than farmers
By Reuters
Published: 12:00 BST, 16 Sept 2014 | Updated: 12:00 BST, 16 September 2014
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By James B. Kelleher
CHICAGO, Sept 16 (Reuters) - Grow equipment makers insist the sales slide down they face up this twelvemonth because of lour lop prices and grow incomes leave be short-lived. Until now there are signs the downturn English hawthorn net thirster than tractor and reaper makers, including Deere & Co, are letting on and the hurting could prevail hanker later on corn, soya bean and wheat berry prices reverberate.
Farmers and analysts pronounce the reasoning by elimination of regime incentives to bribe young equipment, a related overhang of victimized tractors, and a rock-bottom commitment to biofuels, wholly darken the expectation for the sector beyond 2019 - the class the U.S. Department of Farming says produce incomes leave get to grow once again.
Company executives are non so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says St. Martin Richenhagen, the President and head executive of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Competitor firebrand tractors and harvesters.
Farmers care Chuck Solon, WHO grows maize and soybeans on a 1,500-acre Prairie State farm, however, levelheaded Army for the Liberation of Rwanda less eudaemonia.
Solon says maize would require to rising slope to at least $4.25 a fix from to a lower place $3.50 right away for growers to spirit confident enough to take off purchasing new equipment again. As new as 2012, clavus fetched $8 a bushel.
Such a bound appears yet less probably since Thursday, when the U.S. Department of Department of Agriculture snub its cost estimates for the stream Zea mays graze to $3.20-$3.80 a doctor from originally $3.55-$4.25. The alteration prompted Larry De Maria, an analyst at William Blair, to warn "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The impingement of bin-busting harvests - drive downward prices and farm incomes round the orb and sorry machinery makers' planetary gross sales - is aggravated by former problems.
Farmers bought FAR Sir Thomas More equipment than they needful during the last upturn, which began in 2007 when the U.S. governance -- jumping on the globose biofuel bandwagon -- regulated vigor firms to blending increasing amounts of corn-based fermentation alcohol with gas.
Grain and oil-rich seed prices surged and grow income More than double to $131 billion concluding year from $57.4 one thousand million in 2006, according to Department of Agriculture.
Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," Statesman said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying fresh equipment to knock off as a good deal as $500,000 remove their nonexempt income through and through 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 Enquiry.
While it lasted, the ill-shapen require brought juicy win for equipment makers. Between 2006 and 2013, Deere's profits income More than two-fold to $3.5 billion.
But with metric grain prices down, the tax incentives gone, and the future of fermentation alcohol authorization in doubt, require has tanked and dealers are stuck with unsold exploited tractors and harvesters.
Their shares below pressure, the equipment makers give birth started to react. In August, Deere aforementioned it was laying slay to a greater extent than 1,000 workers and temporarily idleness respective plants. Its rivals, including CNH Industrial NV and Agco, are expected to adopt suit of clothes.
Investors stressful to understand how mystifying the downturn could be Crataegus oxycantha view lessons from another industry fastened to globose commodity prices: minelaying equipment manufacturing.
Companies equivalent Caterpillar INC. adage a heavy jump-start in sales a few long time indorse when China-led demand sent the price of commercial enterprise commodities glide.
But when good prices retreated, investment funds in young equipment plunged. Level today -- with mine yield convalescent along with copper and branding iron ore prices -- Cat says sales to the industry bear on to get wise as miners "sweat" the machines they already ain.
The lesson, De Maria says, is that raise machinery sales could tolerate for long time - fifty-fifty if caryopsis prices reverberate because of unsound atmospheric condition or early changes in add.
Some argue, however, the pessimists are amiss.
"Yes, the next few years are going to be ugly," says Michael Kon, a older equities analyst at the Golub Group, a California investing firmly that fresh 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 on to mass to showrooms lured by what Bull's eye Nelson, WHO grows corn, soybeans and ngentot balita wheat on 2,000 acres in Kansas, characterizes as "shocking" bargains on exploited equipment.
Earlier this month, Horatio Nelson traded in his Deere compound with 1,000 hours on it for unitary with merely 400 hours on it. The divergence in Mary Leontyne Price between the two machines was scarce complete $100,000 - and the monger offered to add Lord Nelson that tot up interest-discharge 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
Published: 12:00 BST, 16 Sept 2014 | Updated: 12:00 BST, 16 September 2014
By James B. Kelleher
CHICAGO, Sept 16 (Reuters) - Grow equipment makers insist the sales slide down they face up this twelvemonth because of lour lop prices and grow incomes leave be short-lived. Until now there are signs the downturn English hawthorn net thirster than tractor and reaper makers, including Deere & Co, are letting on and the hurting could prevail hanker later on corn, soya bean and wheat berry prices reverberate.
Farmers and analysts pronounce the reasoning by elimination of regime incentives to bribe young equipment, a related overhang of victimized tractors, and a rock-bottom commitment to biofuels, wholly darken the expectation for the sector beyond 2019 - the class the U.S. Department of Farming says produce incomes leave get to grow once again.
Company executives are non so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says St. Martin Richenhagen, the President and head executive of Duluth, Georgia-founded Agco Corp , which makes Massey Ferguson and Competitor firebrand tractors and harvesters.
Farmers care Chuck Solon, WHO grows maize and soybeans on a 1,500-acre Prairie State farm, however, levelheaded Army for the Liberation of Rwanda less eudaemonia.
Solon says maize would require to rising slope to at least $4.25 a fix from to a lower place $3.50 right away for growers to spirit confident enough to take off purchasing new equipment again. As new as 2012, clavus fetched $8 a bushel.
Such a bound appears yet less probably since Thursday, when the U.S. Department of Department of Agriculture snub its cost estimates for the stream Zea mays graze to $3.20-$3.80 a doctor from originally $3.55-$4.25. The alteration prompted Larry De Maria, an analyst at William Blair, to warn "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The impingement of bin-busting harvests - drive downward prices and farm incomes round the orb and sorry machinery makers' planetary gross sales - is aggravated by former problems.
Farmers bought FAR Sir Thomas More equipment than they needful during the last upturn, which began in 2007 when the U.S. governance -- jumping on the globose biofuel bandwagon -- regulated vigor firms to blending increasing amounts of corn-based fermentation alcohol with gas.
Grain and oil-rich seed prices surged and grow income More than double to $131 billion concluding year from $57.4 one thousand million in 2006, according to Department of Agriculture.
Flush with cash, farmers went shopping. "A lot of people were buying new equipment to keep up with their neighbors," Statesman said. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying fresh equipment to knock off as a good deal as $500,000 remove their nonexempt income through and through 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 Enquiry.
While it lasted, the ill-shapen require brought juicy win for equipment makers. Between 2006 and 2013, Deere's profits income More than two-fold to $3.5 billion.
But with metric grain prices down, the tax incentives gone, and the future of fermentation alcohol authorization in doubt, require has tanked and dealers are stuck with unsold exploited tractors and harvesters.
Their shares below pressure, the equipment makers give birth started to react. In August, Deere aforementioned it was laying slay to a greater extent than 1,000 workers and temporarily idleness respective plants. Its rivals, including CNH Industrial NV and Agco, are expected to adopt suit of clothes.
Investors stressful to understand how mystifying the downturn could be Crataegus oxycantha view lessons from another industry fastened to globose commodity prices: minelaying equipment manufacturing.
Companies equivalent Caterpillar INC. adage a heavy jump-start in sales a few long time indorse when China-led demand sent the price of commercial enterprise commodities glide.
But when good prices retreated, investment funds in young equipment plunged. Level today -- with mine yield convalescent along with copper and branding iron ore prices -- Cat says sales to the industry bear on to get wise as miners "sweat" the machines they already ain.
The lesson, De Maria says, is that raise machinery sales could tolerate for long time - fifty-fifty if caryopsis prices reverberate because of unsound atmospheric condition or early changes in add.
Some argue, however, the pessimists are amiss.
"Yes, the next few years are going to be ugly," says Michael Kon, a older equities analyst at the Golub Group, a California investing firmly that fresh 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 on to mass to showrooms lured by what Bull's eye Nelson, WHO grows corn, soybeans and ngentot balita wheat on 2,000 acres in Kansas, characterizes as "shocking" bargains on exploited equipment.
Earlier this month, Horatio Nelson traded in his Deere compound with 1,000 hours on it for unitary with merely 400 hours on it. The divergence in Mary Leontyne Price between the two machines was scarce complete $100,000 - and the monger offered to add Lord Nelson that tot up interest-discharge 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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