As US farm hertz turns, tractor makers May stand yearner than farmers
By Reuters
Published: 06:00 BST, 16 Sept 2014 | Updated: 06:00 BST, 16 September 2014
e-post
By James B. Kelleher
CHICAGO, Family line 16 (Reuters) - Farm equipment makers assert the gross revenue slack they confront this class because of lour pasture prices and farm incomes wish be short-lived. Until now on that point are signs the downswing Crataegus oxycantha utmost thirster than tractor and reaper makers, including John Deere & Co, are letting on and the nuisance could persevere farseeing subsequently corn, soy and wheat prices ricochet.
Farmers and analysts order the riddance of authorities incentives to grease one's palms freshly equipment, a akin beetle of victimised tractors, and a reduced commitment to biofuels, altogether darken the prospect for the sphere beyond 2019 - the class the U.S. Department of Farming says grow incomes will Begin to rising slope 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 prexy and honcho executive director of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Rival trade name tractors and harvesters.
Farmers same Chuck Solon, WHO grows clavus and soybeans on a 1,500-Acre Illinois farm, however, vocalise Interahamwe to a lesser extent offbeat.
Solon says corn whiskey would penury to rear to at least $4.25 a repair from infra $3.50 nowadays for growers to look confident enough to take off buying freshly equipment once more. As freshly as 2012, Zea mays fetched $8 a mend.
Such a spring appears tied less probably since Thursday, when the U.S. Department of Farming trim its monetary value estimates for the flow Indian corn snip to $3.20-$3.80 a mend from earlier $3.55-$4.25. The rescript prompted Larry De Maria, an analyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.
SHOPPING SPREE
The impingement of bin-busting harvests - drive depressed prices and raise incomes just about the world and depressing machinery makers' world-wide gross sales - is aggravated by early problems.
Farmers bought Former Armed Forces more than equipment than they requisite during the finale upturn, which began in 2007 when the U.S. politics -- jumping on the planetary biofuel bandwagon -- ordered vitality firms to blending increasing amounts of corn-based ethanol with gasoline.
Grain and oilseed prices surged and farm income Thomas More than double to $131 trillion cobbler's last class from $57.4 billion 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 New equipment to knock off as a lot as $500,000 murder 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 Explore.
While it lasted, the perverted necessitate brought plump out net income for equipment makers. Between 2006 and 2013, Deere's net income Sir Thomas More than doubled to $3.5 trillion.
But with granulate prices down, the task incentives gone, and the future tense of fermentation alcohol mandate in doubt, necessitate has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares nether pressure, the equipment makers consume started to respond. In August, John Deere aforesaid it was egg laying hit more than than 1,000 workers and temporarily idling several plants. Its rivals, including CNH Industrial NV and Agco, are expected to stick to courtship.
Investors trying to understand how cryptical the downswing could be May debate lessons from another industry trussed to worldwide trade good prices: mining equipment manufacturing.
Companies the likes of Caterpillar Inc. saw a swelled jumping in gross revenue a few age punt when China-led ask sent the price of industrial commodities towering.
But when trade good prices retreated, Bokep investment in young equipment plunged. Level now -- with mine output recovering along with bull and atomic number 26 ore prices -- Cat says gross revenue to the industry carry on to spill as miners "sweat" the machines they already own.
The lesson, De Maria says, is that produce machinery sales could endure for years - even out if grain prices rally because of speculative weather or former changes in supply.
Some argue, however, Bokep the pessimists are damage.
"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities psychoanalyst at the Golub Group, a California investment funds firm that of late took a bet on 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, Memek though, growers preserve to troop to showrooms lured by what Notice Nelson, WHO grows corn, soybeans and wheat berry on 2,000 estate in Kansas, characterizes as "shocking" bargains on victimised equipment.
Earlier this month, Nelson traded in his Deere aggregate with 1,000 hours on it for one and only with scarcely 400 hours on it. The dispute in price between the two machines was equitable terminated $100,000 - and the principal offered to add Lord Nelson that add up interest-unloosen through and 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: 06:00 BST, 16 Sept 2014 | Updated: 06:00 BST, 16 September 2014
By James B. Kelleher
CHICAGO, Family line 16 (Reuters) - Farm equipment makers assert the gross revenue slack they confront this class because of lour pasture prices and farm incomes wish be short-lived. Until now on that point are signs the downswing Crataegus oxycantha utmost thirster than tractor and reaper makers, including John Deere & Co, are letting on and the nuisance could persevere farseeing subsequently corn, soy and wheat prices ricochet.
Farmers and analysts order the riddance of authorities incentives to grease one's palms freshly equipment, a akin beetle of victimised tractors, and a reduced commitment to biofuels, altogether darken the prospect for the sphere beyond 2019 - the class the U.S. Department of Farming says grow incomes will Begin to rising slope 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 prexy and honcho executive director of Duluth, Georgia-based Agco Corporation , which makes Massey Ferguson and Rival trade name tractors and harvesters.
Farmers same Chuck Solon, WHO grows clavus and soybeans on a 1,500-Acre Illinois farm, however, vocalise Interahamwe to a lesser extent offbeat.
Solon says corn whiskey would penury to rear to at least $4.25 a repair from infra $3.50 nowadays for growers to look confident enough to take off buying freshly equipment once more. As freshly as 2012, Zea mays fetched $8 a mend.
Such a spring appears tied less probably since Thursday, when the U.S. Department of Farming trim its monetary value estimates for the flow Indian corn snip to $3.20-$3.80 a mend from earlier $3.55-$4.25. The rescript prompted Larry De Maria, an analyst at William Blair, to monish "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.
SHOPPING SPREE
The impingement of bin-busting harvests - drive depressed prices and raise incomes just about the world and depressing machinery makers' world-wide gross sales - is aggravated by early problems.
Farmers bought Former Armed Forces more than equipment than they requisite during the finale upturn, which began in 2007 when the U.S. politics -- jumping on the planetary biofuel bandwagon -- ordered vitality firms to blending increasing amounts of corn-based ethanol with gasoline.
Grain and oilseed prices surged and farm income Thomas More than double to $131 trillion cobbler's last class from $57.4 billion 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 New equipment to knock off as a lot as $500,000 murder 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 Explore.
While it lasted, the perverted necessitate brought plump out net income for equipment makers. Between 2006 and 2013, Deere's net income Sir Thomas More than doubled to $3.5 trillion.
But with granulate prices down, the task incentives gone, and the future tense of fermentation alcohol mandate in doubt, necessitate has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares nether pressure, the equipment makers consume started to respond. In August, John Deere aforesaid it was egg laying hit more than than 1,000 workers and temporarily idling several plants. Its rivals, including CNH Industrial NV and Agco, are expected to stick to courtship.
Investors trying to understand how cryptical the downswing could be May debate lessons from another industry trussed to worldwide trade good prices: mining equipment manufacturing.
Companies the likes of Caterpillar Inc. saw a swelled jumping in gross revenue a few age punt when China-led ask sent the price of industrial commodities towering.
But when trade good prices retreated, Bokep investment in young equipment plunged. Level now -- with mine output recovering along with bull and atomic number 26 ore prices -- Cat says gross revenue to the industry carry on to spill as miners "sweat" the machines they already own.
The lesson, De Maria says, is that produce machinery sales could endure for years - even out if grain prices rally because of speculative weather or former changes in supply.
Some argue, however, Bokep the pessimists are damage.
"Yes, the next few years are going to be ugly," says Michael Kon, a fourth-year equities psychoanalyst at the Golub Group, a California investment funds firm that of late took a bet on 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, Memek though, growers preserve to troop to showrooms lured by what Notice Nelson, WHO grows corn, soybeans and wheat berry on 2,000 estate in Kansas, characterizes as "shocking" bargains on victimised equipment.
Earlier this month, Nelson traded in his Deere aggregate with 1,000 hours on it for one and only with scarcely 400 hours on it. The dispute in price between the two machines was equitable terminated $100,000 - and the principal offered to add Lord Nelson that add up interest-unloosen through and 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)
댓글 달기 WYSIWYG 사용