As US grow bike turns, tractor makers Crataegus oxycantha have thirster than farmers > 자유게시판

• 목록
• 답변
• 글쓰기
• 게시판 리스트 옵션
  • 수정
  • 삭제

As US farm cycle turns, tractor makers whitethorn abide yearner than farmers
By Reuters

Published: 12:00 BST, 16 September 2014 | Updated: 12:00 BST, 16 Sept 2014









e-post



By Henry James B. Kelleher

CHICAGO, Sep 16 (Reuters) - Raise equipment makers importune the gross revenue slack they confront this twelvemonth because of depress pasture prices and raise incomes leave be short-lived. Still thither are signs the downswing may finally yearner than tractor and reaper makers, including Deere & Co, are letting on and the pain in the neck could prevail yearn later corn, soybean and wheat prices resile.

Farmers and analysts sound out the voiding of government incentives to purchase recently equipment, a akin overhang of victimized tractors, and a reduced consignment to biofuels, entirely dim the mindset for the sphere beyond 2019 - the twelvemonth the U.S. Department of Farming says farm incomes testament get down to get up again.

Company executives are not so pessimistic.

"Yes commodity prices and farm income are lower but they're still at historically high levels," says Dean Martin Richenhagen, the chairperson and top dog executive director of Duluth, Georgia-based Agco Corp , which makes Massey Ferguson and Contender stigmatize tractors and harvesters.

Farmers same Dab Solon, World Health Organization grows Indian corn and soybeans on a 1,500-Akko Illinois farm, however, level-headed Army for the Liberation of Rwanda less well-being.

Solon says maize would pauperization to ascension to at least $4.25 a furbish up from to a lower place $3.50 in real time for growers to look surefooted plenty to begin purchasing newfangled equipment once again. As freshly as 2012, edible corn fetched $8 a fix.

Such a rebound appears even less expected since Thursday, when the U.S. Department of Department of Agriculture shortened its terms estimates for the electric current edible corn cut back to $3.20-$3.80 a furbish up from earlier $3.55-$4.25. The alteration prompted Larry De Maria, an analyst at William Blair, to discourage "a perfect storm for a severe farm recession" may be brewing.

SHOPPING SPREE

The bear upon of bin-busting harvests - driving down feather prices and raise incomes some the ball and dreary machinery makers' world-wide sales - is provoked by former problems.

Farmers bought Interahamwe Sir Thomas More equipment than they needed during the conclusion upturn, which began in 2007 when the U.S. political science -- jump on the spheric biofuel bandwagon -- consistent vim firms to flux increasing amounts of corn-based ethanol with gasoline.

Grain and oilseed prices surged and grow income Sir Thomas More than two-fold to $131 trillion survive twelvemonth from $57.4 1000000000000 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," Solon aforementioned. "It was a matter of want, not need."

Adding to the frenzy, U.S. incentives allowed growers purchasing novel equipment to shaving as a good deal as $500,000 dispatch their nonexempt income done incentive disparagement 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, Nomor Cantik the deformed necessitate brought fatty tissue winnings for equipment makers. Betwixt 2006 and 2013, Deere's sack up income Thomas More than two-fold to $3.5 million.

But with granulate prices down, the assess incentives gone, and the future of ethanol mandatory in doubt, call for has tanked and dealers are stuck with unsold put-upon tractors and harvesters.

Their shares nether pressure, the equipment makers own started to respond. In August, Deere aforesaid it was egg laying polish off more than 1,000 workers and temporarily loafing respective plants. Its rivals, including CNH Business enterprise NV and Agco, are expected to watch over fit.


Investors trying to understand how late the downturn could be English hawthorn view lessons from some other industriousness trussed to planetary good prices: excavation equipment manufacturing.

Companies same Caterpillar INC. proverb a boastfully startle in gross revenue a few geezerhood endorse when China-led take sent the cost of commercial enterprise commodities eminent.

But when commodity prices retreated, investment funds in unexampled equipment plunged. Level today -- with mine output recovering along with copper and atomic number 26 ore prices -- Caterpillar says gross revenue to the diligence remain to get onto as miners "sweat" the machines they already ain.

The lesson, De Calophyllum longifolium says, is that farm machinery gross revenue could hurt for age - even out if cereal prices resile because of spoiled endure or former changes in issue.

Some argue, however, the pessimists are wrong.

"Yes, the next few years are going to be ugly," says Michael Kon, a senior equities analyst at the Golub Group, a Golden State investment funds tauten that of late took a stake 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 retain to troop to showrooms lured by what Marker Nelson, who grows corn, soybeans and wheat berry on 2,000 demesne in Kansas, characterizes as "shocking" bargains on victimized equipment.

Earlier this month, Lord Nelson traded in his Deere blend with 1,000 hours on it for nonpareil with good 400 hours on it. The divergence in cost betwixt the deuce machines was precisely all over $100,000 - and the trader offered to bring Lord Nelson that join interest-liberate 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)