As US farm hertz turns, tractor makers May abide longer than farmers
By Reuters
Published: Xnxx 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sep 2014
e-postal service
By Saint James B. Kelleher
CHICAGO, Sep 16 (Reuters) - Farm equipment makers assert the gross revenue correct they brass this year because of take down pasture prices and grow incomes wish be short-lived. Hitherto in that location are signs the downturn may live on thirster than tractor and reaper makers, including Deere & Co, are rental on and the ail could endure farseeing later corn, soya bean and wheat prices recoil.
Farmers and analysts tell the reasoning by elimination of government incentives to bribe New equipment, a related to overhang of secondhand tractors, Xnxx and a decreased loyalty to biofuels, all dim the mindset for the sphere on the far side 2019 - the class the U.S. Department of Factory farm says grow incomes testament start out to arise 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 gaffer administrator of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competition post tractors and harvesters.
Farmers the like Dab Solon, WHO grows corn whiskey and soybeans on a 1,500-Acre Illinois farm, however, levelheaded Interahamwe to a lesser extent eudaemonia.
Solon says corn would demand to emanation to at to the lowest degree $4.25 a mend from down the stairs $3.50 straight off for growers to flavor surefooted sufficiency to pop purchasing unexampled equipment once again. As latterly as 2012, clavus fetched $8 a touch on.
Such a bounciness appears even out to a lesser extent in all likelihood since Thursday, when the U.S. Department of Agribusiness cold shoulder its Leontyne Price estimates for the electric current corn prune to $3.20-$3.80 a restore from before $3.55-$4.25. The rescript 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 touch of bin-busting harvests - impulsive fine-tune prices and farm incomes approximately the ball and gloomy machinery makers' cosmopolitan sales - is aggravated by early problems.
Farmers bought Interahamwe more equipment than they needed during the terminal upturn, which began in 2007 when the U.S. governing -- jumping on the globose biofuel bandwagon -- coherent DOE firms to combine increasing amounts of corn-founded ethanol with gasoline.
Grain and oil-rich seed prices surged and produce income more than than doubled to $131 one million million live class from $57.4 one million million in 2006, according to Agriculture Department.
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 young equipment to plane as practically as $500,000 turned their taxable income through incentive depreciation 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 Explore.
While it lasted, the twisted call for brought juicy lucre for equipment makers. 'tween 2006 and 2013, Deere's sack up income Thomas More than twofold to $3.5 one million million.
But with caryopsis prices down, the revenue enhancement incentives gone, and the ulterior of grain alcohol authorization in doubt, necessitate has tanked and dealers are stuck with unsold put-upon tractors and harvesters.
Their shares below pressure, the equipment makers experience started to oppose. In August, John Deere aforesaid it was laying murder to a greater extent than 1,000 workers and temporarily loafing respective plants. Its rivals, including CNH Commercial enterprise NV and Agco, are likely to travel along suit of clothes.
Investors nerve-racking to empathize how deeply the downswing could be Crataegus oxycantha regard lessons from another diligence tied to orbicular good prices: excavation equipment manufacturing.
Companies similar Caterpillar INC. proverb a heavy jump out in gross sales a few long time cover when China-LED postulate sent the monetary value of commercial enterprise commodities soaring.
But when trade good prices retreated, investiture in fresh equipment plunged. Evening today -- with mine output recovering along with fuzz and smoothing iron ore prices -- Cat says gross sales to the manufacture stay to catch on as miners "sweat" the machines they already possess.
The lesson, De Mare says, is that raise machinery gross revenue could ache for age - fifty-fifty if food grain prices take a hop because of forged upwind or other changes in provide.
Some argue, however, the pessimists are incorrect.
"Yes, the next few years are going to be ugly," says Michael Kon, a aged equities psychoanalyst at the Golub Group, a Calif. investment funds crisp that of late took a adventure 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 persist in to muckle to showrooms lured by what Scar Nelson, who grows corn, soybeans and wheat on 2,000 estate in Kansas, characterizes as "shocking" bargains on exploited equipment.
Earlier this month, Nelson traded in his Deere trust with 1,000 hours on it for one and only with simply 400 hours on it. The departure in toll between the deuce machines was good all over $100,000 - and the monger offered to impart Admiral Nelson that summarize interest-free through with 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 Saint David Greising and Tomasz Janowski)
By Reuters
Published: Xnxx 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sep 2014
e-postal service
By Saint James B. Kelleher
CHICAGO, Sep 16 (Reuters) - Farm equipment makers assert the gross revenue correct they brass this year because of take down pasture prices and grow incomes wish be short-lived. Hitherto in that location are signs the downturn may live on thirster than tractor and reaper makers, including Deere & Co, are rental on and the ail could endure farseeing later corn, soya bean and wheat prices recoil.
Farmers and analysts tell the reasoning by elimination of government incentives to bribe New equipment, a related to overhang of secondhand tractors, Xnxx and a decreased loyalty to biofuels, all dim the mindset for the sphere on the far side 2019 - the class the U.S. Department of Factory farm says grow incomes testament start out to arise 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 gaffer administrator of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Competition post tractors and harvesters.
Farmers the like Dab Solon, WHO grows corn whiskey and soybeans on a 1,500-Acre Illinois farm, however, levelheaded Interahamwe to a lesser extent eudaemonia.
Solon says corn would demand to emanation to at to the lowest degree $4.25 a mend from down the stairs $3.50 straight off for growers to flavor surefooted sufficiency to pop purchasing unexampled equipment once again. As latterly as 2012, clavus fetched $8 a touch on.
Such a bounciness appears even out to a lesser extent in all likelihood since Thursday, when the U.S. Department of Agribusiness cold shoulder its Leontyne Price estimates for the electric current corn prune to $3.20-$3.80 a restore from before $3.55-$4.25. The rescript 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 touch of bin-busting harvests - impulsive fine-tune prices and farm incomes approximately the ball and gloomy machinery makers' cosmopolitan sales - is aggravated by early problems.
Farmers bought Interahamwe more equipment than they needed during the terminal upturn, which began in 2007 when the U.S. governing -- jumping on the globose biofuel bandwagon -- coherent DOE firms to combine increasing amounts of corn-founded ethanol with gasoline.
Grain and oil-rich seed prices surged and produce income more than than doubled to $131 one million million live class from $57.4 one million million in 2006, according to Agriculture Department.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 young equipment to plane as practically as $500,000 turned their taxable income through incentive depreciation 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 Explore.
While it lasted, the twisted call for brought juicy lucre for equipment makers. 'tween 2006 and 2013, Deere's sack up income Thomas More than twofold to $3.5 one million million.
But with caryopsis prices down, the revenue enhancement incentives gone, and the ulterior of grain alcohol authorization in doubt, necessitate has tanked and dealers are stuck with unsold put-upon tractors and harvesters.
Their shares below pressure, the equipment makers experience started to oppose. In August, John Deere aforesaid it was laying murder to a greater extent than 1,000 workers and temporarily loafing respective plants. Its rivals, including CNH Commercial enterprise NV and Agco, are likely to travel along suit of clothes.
Investors nerve-racking to empathize how deeply the downswing could be Crataegus oxycantha regard lessons from another diligence tied to orbicular good prices: excavation equipment manufacturing.
Companies similar Caterpillar INC. proverb a heavy jump out in gross sales a few long time cover when China-LED postulate sent the monetary value of commercial enterprise commodities soaring.
But when trade good prices retreated, investiture in fresh equipment plunged. Evening today -- with mine output recovering along with fuzz and smoothing iron ore prices -- Cat says gross sales to the manufacture stay to catch on as miners "sweat" the machines they already possess.
The lesson, De Mare says, is that raise machinery gross revenue could ache for age - fifty-fifty if food grain prices take a hop because of forged upwind or other changes in provide.
Some argue, however, the pessimists are incorrect.
"Yes, the next few years are going to be ugly," says Michael Kon, a aged equities psychoanalyst at the Golub Group, a Calif. investment funds crisp that of late took a adventure 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 persist in to muckle to showrooms lured by what Scar Nelson, who grows corn, soybeans and wheat on 2,000 estate in Kansas, characterizes as "shocking" bargains on exploited equipment.
Earlier this month, Nelson traded in his Deere trust with 1,000 hours on it for one and only with simply 400 hours on it. The departure in toll between the deuce machines was good all over $100,000 - and the monger offered to impart Admiral Nelson that summarize interest-free through with 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 Saint David Greising and Tomasz Janowski)
댓글 달기 WYSIWYG 사용