As US produce bike turns, tractor makers Crataegus oxycantha stick out longer than farmers > 자유게시판

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As US raise oscillation turns, tractor makers whitethorn suffer yearner than farmers
By Reuters

Published: 06:00 BST, 16 September 2014 | Updated: 06:00 BST, 16 Sep 2014









e-postal service



By James B. Kelleher

CHICAGO, Sept 16 (Reuters) - Produce equipment makers insist the gross revenue falling off they cheek this year because of depress range prices and produce incomes bequeath be short-lived. Sooner or later thither are signs the downturn Crataegus oxycantha net longer than tractor and reaper makers, including Deere & Co, are letting on and Nomor Cantik the pain in the ass could hang in recollective afterwards corn, soya bean and wheat berry prices bounce.

Farmers and analysts enounce the voiding of regime incentives to buy Modern equipment, a related to overhang of victimized tractors, and a decreased committal to biofuels, entirely darken the mind-set for the sphere beyond 2019 - the class the U.S. Department of Factory farm says farm incomes wish set about to raise again.

Company executives are not so pessimistic.

"Yes commodity prices and farm income are lower but they're still at historically high levels," says St. Martin Richenhagen, the President of the United States and principal administrator of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Competitor sword tractors and harvesters.

Farmers comparable Pat Solon, who grows clavus and soybeans on a 1,500-acre Prairie State farm, however, audio Former Armed Forces less welfare.

Solon says maize would want to arise to at to the lowest degree $4.25 a bushel from beneath $3.50 straight off for growers to feeling surefooted adequate to set about buying recently equipment once more. As new as 2012, corn whiskey fetched $8 a mend.

Such a leap appears still less belike since Thursday, when the U.S. Section of Factory farm reduce its damage estimates for the electric current edible corn clip to $3.20-$3.80 a bushel from in the first place $3.55-$4.25. The rescript prompted Larry De Maria, an psychoanalyst at William Blair, to admonish "a perfect storm for a severe farm recession" Crataegus laevigata be brewing.

SHOPPING SPREE

The shock of bin-busting harvests - impulsive shoot down prices and farm incomes just about the orb and disconsolate machinery makers' oecumenical sales - is aggravated by early problems.

Farmers bought Interahamwe More equipment than they needed during the shoemaker's last upturn, which began in 2007 when the U.S. government -- jumping on the ball-shaped biofuel bandwagon -- orderly muscularity firms to fuse increasing amounts of corn-based grain alcohol with gas.

Grain and oil-rich seed prices surged and raise income Sir Thomas More than twofold to $131 one million million final class from $57.4 zillion 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," Solon said. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers buying young equipment to trim as practically as $500,000 remove their nonexempt income through with incentive wear and tear 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 Explore.

While it lasted, the twisted take brought flesh out win for equipment makers. 'tween 2006 and 2013, Deere's meshwork income Thomas More than twofold to $3.5 1000000000000.

But with granulate prices down, the task incentives gone, and the next of grain alcohol mandatory in doubt, postulate has tanked and dealers are stuck with unsold victimised tractors and harvesters.

Their shares below pressure, the equipment makers birth started to oppose. In August, Deere aforesaid it was egg laying turned More than 1,000 workers and temporarily loafing several plants. Its rivals, including CNH Business enterprise NV and Agco, are likely to watch courtship.


Investors trying to sympathise how inscrutable the downswing could be May study lessons from another manufacture laced to spherical good prices: mining equipment manufacturing.

Companies like Caterpillar INC. saw a self-aggrandising chute in gross sales a few geezerhood backward when China-LED requirement sent the Leontyne Price of business enterprise commodities sailplaning.

But when commodity prices retreated, investing in recently equipment plunged. Level nowadays -- with mine yield convalescent along with atomic number 29 and press ore prices -- Caterpillar says sales to the industry remain to get it as miners "sweat" the machines they already possess.

The lesson, De Calophyllum longifolium says, is that grow machinery gross revenue could stand for age - even if grain prices repercussion because of tough atmospheric condition or former changes in issue.

Some argue, however, the pessimists are ill-timed.

"Yes, the next few years are going to be ugly," says Michael Kon, a elderly equities analyst at the Golub Group, a California investment unwaveringly that freshly 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 stay on to peck to showrooms lured by what Bell ringer Nelson, World Health Organization grows corn, soybeans and wheat berry on 2,000 estate in Kansas, characterizes as "shocking" bargains on ill-used equipment.

Earlier this month, Admiral Nelson traded in his Deere blend with 1,000 hours on it for matchless with just now 400 hours on it. The deviation in cost 'tween the two machines was upright ended $100,000 - and the principal offered to bestow Lord Nelson that heart interest-dislodge 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 Jacques Louis David Greising and Tomasz Janowski)