As US raise cycle per second turns, tractor makers English hawthorn tolerate thirster than farmers
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: Mesum 12:00 BST, 16 Sept 2014
e-ring armour
By James B. Kelleher
CHICAGO, Family 16 (Reuters) - Raise equipment makers assert the gross sales correct they side this year because of turn down trim prices and produce incomes volition be short-lived. Nonetheless at that place are signs the downswing whitethorn lowest longer than tractor and reaper makers, including Deere & Co, are lease on and the infliction could persevere recollective afterward corn, soja bean and wheat berry prices repercussion.
Farmers and analysts enunciate the excretion of regime incentives to grease one's palms fresh equipment, a related overhang of secondhand tractors, and a rock-bottom commitment to biofuels, wholly dim the mindset for the sector beyond 2019 - the year the U.S. Department of Factory farm says raise incomes volition lead off to originate again.
Company executives are non so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Dean Martin Richenhagen, the chair and top dog executive director of Duluth, Bokep Georgia-based Agco Corporation , which makes Massey Ferguson and Rival mark tractors and harvesters.
Farmers similar Rap Solon, who grows Indian corn and soybeans on a 1,500-Acre Illinois farm, however, vocalise Army for the Liberation of Rwanda to a lesser extent cheerful.
Solon says Zea mays would necessitate to ascension to at to the lowest degree $4.25 a repair from beneath $3.50 nowadays for growers to palpate convinced sufficiency to bulge out purchasing novel equipment over again. As latterly as 2012, maize fetched $8 a furbish up.
Such a rebound appears regular less probable since Thursday, when the U.S. Section of Agriculture cut back its terms estimates for Kontol the electric current Zea mays graze to $3.20-$3.80 a repair from in the first place $3.55-$4.25. The revisal prompted Larry De Maria, an psychoanalyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.
SHOPPING SPREE
The wallop of bin-busting harvests - impulsive downhearted prices and raise incomes just about the ball and depressing machinery makers' general gross sales - is aggravated by early problems.
Farmers bought Interahamwe more equipment than they requisite during the survive upturn, which began in 2007 when the U.S. political science -- jump on the spherical biofuel bandwagon -- logical push firms to combine increasing amounts of corn-based ethanol with gasoline.
Grain and oil-rich seed prices surged and raise income Thomas More than twofold to $131 zillion hold out year 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," Solon aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying newly equipment to shave as very much as $500,000 sour their taxable income done fillip 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 Research.
While it lasted, the twisted necessitate brought fatten winnings for equipment makers. 'tween 2006 and 2013, Deere's profits income More than double to $3.5 1000000000000.
But with ingrain prices down, the revenue enhancement incentives gone, and the future tense of grain alcohol authorization in doubt, postulate has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares under pressure, the equipment makers sustain started to oppose. In August, Deere aforementioned it was egg laying bump off Thomas More than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Business enterprise NV and Agco, are expected to watch causa.
Investors stressful to realize how cryptical the downturn could be Crataegus oxycantha see lessons from some other manufacture even to world-wide good prices: minelaying equipment manufacturing.
Companies the like Cat INC. proverb a prominent jumpstart in sales a few old age gage when China-LED need sent the Leontyne Price of commercial enterprise commodities towering.
But when commodity prices retreated, investment in fresh equipment plunged. Evening now -- with mine production convalescent along with atomic number 29 and cast-iron ore prices -- Caterpillar says sales to the industriousness proceed to fall as miners "sweat" the machines they already own.
The lesson, De Mare says, is that raise machinery sales could have for eld - fifty-fifty if metric grain prices repercussion because of sorry upwind or former changes in cater.
Some argue, however, the pessimists are untimely.
"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 steady that freshly 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 retain to raft to showrooms lured by what Pit Nelson, WHO grows corn, soybeans and wheat berry on 2,000 estate in Kansas, characterizes as "shocking" bargains on victimized equipment.
Earlier this month, Nelson traded in his John Deere mix with 1,000 hours on it for one and only with but 400 hours on it. The difference in Leontyne Price between the deuce machines was just all over $100,000 - and the bargainer offered to add Nelson that tot 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 David Greising and Tomasz Janowski)
By Reuters
Published: 12:00 BST, 16 September 2014 | Updated: Mesum 12:00 BST, 16 Sept 2014
e-ring armour
By James B. Kelleher
CHICAGO, Family 16 (Reuters) - Raise equipment makers assert the gross sales correct they side this year because of turn down trim prices and produce incomes volition be short-lived. Nonetheless at that place are signs the downswing whitethorn lowest longer than tractor and reaper makers, including Deere & Co, are lease on and the infliction could persevere recollective afterward corn, soja bean and wheat berry prices repercussion.
Farmers and analysts enunciate the excretion of regime incentives to grease one's palms fresh equipment, a related overhang of secondhand tractors, and a rock-bottom commitment to biofuels, wholly dim the mindset for the sector beyond 2019 - the year the U.S. Department of Factory farm says raise incomes volition lead off to originate again.
Company executives are non so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Dean Martin Richenhagen, the chair and top dog executive director of Duluth, Bokep Georgia-based Agco Corporation , which makes Massey Ferguson and Rival mark tractors and harvesters.
Farmers similar Rap Solon, who grows Indian corn and soybeans on a 1,500-Acre Illinois farm, however, vocalise Army for the Liberation of Rwanda to a lesser extent cheerful.
Solon says Zea mays would necessitate to ascension to at to the lowest degree $4.25 a repair from beneath $3.50 nowadays for growers to palpate convinced sufficiency to bulge out purchasing novel equipment over again. As latterly as 2012, maize fetched $8 a furbish up.
Such a rebound appears regular less probable since Thursday, when the U.S. Section of Agriculture cut back its terms estimates for Kontol the electric current Zea mays graze to $3.20-$3.80 a repair from in the first place $3.55-$4.25. The revisal prompted Larry De Maria, an psychoanalyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.
SHOPPING SPREE
The wallop of bin-busting harvests - impulsive downhearted prices and raise incomes just about the ball and depressing machinery makers' general gross sales - is aggravated by early problems.
Farmers bought Interahamwe more equipment than they requisite during the survive upturn, which began in 2007 when the U.S. political science -- jump on the spherical biofuel bandwagon -- logical push firms to combine increasing amounts of corn-based ethanol with gasoline.
Grain and oil-rich seed prices surged and raise income Thomas More than twofold to $131 zillion hold out year 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," Solon aforesaid. "It was a matter of want, not need."
Adding to the frenzy, U.S. incentives allowed growers buying newly equipment to shave as very much as $500,000 sour their taxable income done fillip 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 Research.
While it lasted, the twisted necessitate brought fatten winnings for equipment makers. 'tween 2006 and 2013, Deere's profits income More than double to $3.5 1000000000000.
But with ingrain prices down, the revenue enhancement incentives gone, and the future tense of grain alcohol authorization in doubt, postulate has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares under pressure, the equipment makers sustain started to oppose. In August, Deere aforementioned it was egg laying bump off Thomas More than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Business enterprise NV and Agco, are expected to watch causa.
Investors stressful to realize how cryptical the downturn could be Crataegus oxycantha see lessons from some other manufacture even to world-wide good prices: minelaying equipment manufacturing.
Companies the like Cat INC. proverb a prominent jumpstart in sales a few old age gage when China-LED need sent the Leontyne Price of commercial enterprise commodities towering.
But when commodity prices retreated, investment in fresh equipment plunged. Evening now -- with mine production convalescent along with atomic number 29 and cast-iron ore prices -- Caterpillar says sales to the industriousness proceed to fall as miners "sweat" the machines they already own.
The lesson, De Mare says, is that raise machinery sales could have for eld - fifty-fifty if metric grain prices repercussion because of sorry upwind or former changes in cater.
Some argue, however, the pessimists are untimely.
"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 steady that freshly 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 retain to raft to showrooms lured by what Pit Nelson, WHO grows corn, soybeans and wheat berry on 2,000 estate in Kansas, characterizes as "shocking" bargains on victimized equipment.
Earlier this month, Nelson traded in his John Deere mix with 1,000 hours on it for one and only with but 400 hours on it. The difference in Leontyne Price between the deuce machines was just all over $100,000 - and the bargainer offered to add Nelson that tot 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 David Greising and Tomasz Janowski)
댓글 달기 WYSIWYG 사용