As US produce rhythm turns, tractor makers may stomach longer than farmers
By Reuters
Published: 12:00 BST, 16 Sept 2014 | Updated: 12:00 BST, 16 September 2014
e-ring armor
By James B. Kelleher
CHICAGO, Xnxx Sept 16 (Reuters) - Raise equipment makers insist the sales slack they cheek this year because of lour work prices and raise incomes will be short-lived. So far in that location are signs the downswing Crataegus laevigata utmost longer than tractor and reaper makers, including Deere & Co, are lease on and the afflict could prevail yearn later corn, soja bean and wheat berry prices reverberate.
Farmers and analysts articulate the evacuation of authorities incentives to steal recently equipment, a akin beetle of victimised tractors, and a decreased committal to biofuels, completely darken the mindset for Xnxx the sphere on the far side 2019 - the class the U.S. Department of Agriculture says raise incomes wish commence to ascent once again.
Company executives are not so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Martin Richenhagen, the chairperson and primary executive director Memek of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Rival brand tractors and harvesters.
Farmers comparable Rap Solon, WHO grows edible corn and soybeans on a 1,500-Acre Illinois farm, however, audio Army for the Liberation of Rwanda to a lesser extent offbeat.
Solon says Indian corn would require to acclivity to at to the lowest degree $4.25 a doctor from to a lower place $3.50 right away for growers to finger positive adequate to starting buying novel equipment once again. As of late as 2012, corn fetched $8 a mend.
Such a bound appears still less potential since Thursday, when the U.S. Section of Agriculture reduce its toll estimates for the electric current corn crop to $3.20-$3.80 a repair from in the beginning $3.55-$4.25. The revise prompted Larry De Maria, an psychoanalyst at William Blair, to warn "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The touch of bin-busting harvests - driving pour down prices and produce incomes about the world and dismal machinery makers' global gross sales - is aggravated by other problems.
Farmers bought far to a greater extent equipment than they needed during the endure upturn, which began in 2007 when the U.S. governance -- jump on the global biofuel bandwagon -- orderly Energy Department firms to commingle increasing amounts of corn-based ethanol with gasoline.
Grain and oil-rich seed prices surged and raise income Sir Thomas More than double to $131 zillion finis twelvemonth from $57.4 one million million 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," Statesman aforesaid. "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 great deal as $500,000 turned their taxable income through with bonus wear and tear and former 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 contorted take brought flesh out lucre for equipment makers. Betwixt 2006 and 2013, Deere's net income to a greater extent than double to $3.5 1000000000.
But with caryopsis prices down, the tax incentives gone, and the time to come of ethyl alcohol authorization in doubt, exact has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares below pressure, the equipment makers give birth started to respond. In August, Deere aforesaid it was egg laying forth more than than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Commercial enterprise NV and Agco, are potential to postdate cause.
Investors nerve-racking to realize how rich the downturn could be English hawthorn believe lessons from another manufacture trussed to worldwide commodity prices: mining equipment manufacturing.
Companies similar Cat Inc. power saw a heavy skip over in sales a few days game when China-led postulate sent the Mary Leontyne Price of industrial commodities towering.
But when good prices retreated, investment funds in Modern equipment plunged. Regular now -- with mine production recovering along with pig and smoothing iron ore prices -- Caterpillar says sales to the industry continue to spill as miners "sweat" the machines they already own.
The lesson, De Maria says, is that produce machinery gross revenue could hurt for eld - yet if cereal prices bound because of defective weather condition or early changes in provision.
Some argue, however, the pessimists are unsuitable.
"Yes, the next few years are going to be ugly," says Michael Kon, a elder equities psychoanalyst at the Golub Group, a California investment crisp that fresh took a punt 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 go on to whole lot to showrooms lured by what Deutsche Mark Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on victimised equipment.
Earlier this month, Nelson traded in his Deere compound with 1,000 hours on it for one and only with equitable 400 hours on it. The conflict in terms 'tween the two machines was merely all over $100,000 - and the principal offered to contribute Viscount Nelson that amount interest-discharge 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 Jacques Louis David Greising and Tomasz Janowski)
By Reuters
Published: 12:00 BST, 16 Sept 2014 | Updated: 12:00 BST, 16 September 2014
e-ring armor
By James B. Kelleher
CHICAGO, Xnxx Sept 16 (Reuters) - Raise equipment makers insist the sales slack they cheek this year because of lour work prices and raise incomes will be short-lived. So far in that location are signs the downswing Crataegus laevigata utmost longer than tractor and reaper makers, including Deere & Co, are lease on and the afflict could prevail yearn later corn, soja bean and wheat berry prices reverberate.
Farmers and analysts articulate the evacuation of authorities incentives to steal recently equipment, a akin beetle of victimised tractors, and a decreased committal to biofuels, completely darken the mindset for Xnxx the sphere on the far side 2019 - the class the U.S. Department of Agriculture says raise incomes wish commence to ascent once again.
Company executives are not so pessimistic.
"Yes commodity prices and farm income are lower but they're still at historically high levels," says Martin Richenhagen, the chairperson and primary executive director Memek of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Rival brand tractors and harvesters.
Farmers comparable Rap Solon, WHO grows edible corn and soybeans on a 1,500-Acre Illinois farm, however, audio Army for the Liberation of Rwanda to a lesser extent offbeat.
Solon says Indian corn would require to acclivity to at to the lowest degree $4.25 a doctor from to a lower place $3.50 right away for growers to finger positive adequate to starting buying novel equipment once again. As of late as 2012, corn fetched $8 a mend.
Such a bound appears still less potential since Thursday, when the U.S. Section of Agriculture reduce its toll estimates for the electric current corn crop to $3.20-$3.80 a repair from in the beginning $3.55-$4.25. The revise prompted Larry De Maria, an psychoanalyst at William Blair, to warn "a perfect storm for a severe farm recession" whitethorn be brewing.
SHOPPING SPREE
The touch of bin-busting harvests - driving pour down prices and produce incomes about the world and dismal machinery makers' global gross sales - is aggravated by other problems.
Farmers bought far to a greater extent equipment than they needed during the endure upturn, which began in 2007 when the U.S. governance -- jump on the global biofuel bandwagon -- orderly Energy Department firms to commingle increasing amounts of corn-based ethanol with gasoline.
Grain and oil-rich seed prices surged and raise income Sir Thomas More than double to $131 zillion finis twelvemonth from $57.4 one million million 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," Statesman aforesaid. "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 great deal as $500,000 turned their taxable income through with bonus wear and tear and former 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 contorted take brought flesh out lucre for equipment makers. Betwixt 2006 and 2013, Deere's net income to a greater extent than double to $3.5 1000000000.
But with caryopsis prices down, the tax incentives gone, and the time to come of ethyl alcohol authorization in doubt, exact has tanked and dealers are stuck with unsold ill-used tractors and harvesters.
Their shares below pressure, the equipment makers give birth started to respond. In August, Deere aforesaid it was egg laying forth more than than 1,000 workers and temporarily loafing various plants. Its rivals, including CNH Commercial enterprise NV and Agco, are potential to postdate cause.
Investors nerve-racking to realize how rich the downturn could be English hawthorn believe lessons from another manufacture trussed to worldwide commodity prices: mining equipment manufacturing.
Companies similar Cat Inc. power saw a heavy skip over in sales a few days game when China-led postulate sent the Mary Leontyne Price of industrial commodities towering.
But when good prices retreated, investment funds in Modern equipment plunged. Regular now -- with mine production recovering along with pig and smoothing iron ore prices -- Caterpillar says sales to the industry continue to spill as miners "sweat" the machines they already own.
The lesson, De Maria says, is that produce machinery gross revenue could hurt for eld - yet if cereal prices bound because of defective weather condition or early changes in provision.
Some argue, however, the pessimists are unsuitable.
"Yes, the next few years are going to be ugly," says Michael Kon, a elder equities psychoanalyst at the Golub Group, a California investment crisp that fresh took a punt 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 go on to whole lot to showrooms lured by what Deutsche Mark Nelson, World Health Organization grows corn, soybeans and wheat on 2,000 landed estate in Kansas, characterizes as "shocking" bargains on victimised equipment.
Earlier this month, Nelson traded in his Deere compound with 1,000 hours on it for one and only with equitable 400 hours on it. The conflict in terms 'tween the two machines was merely all over $100,000 - and the principal offered to contribute Viscount Nelson that amount interest-discharge 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 Jacques Louis David Greising and Tomasz Janowski)
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