Supply and demand is alive and well in the U.S. agricultural economy. Harvest of U.S. crops has begun and brings with it a great expectation of a record yields. Like a huge seesaw, high demand for a commodity elevates the prices customers are willing to pay for that product and when there is an excess worldwide inventory, prices fall to meet the slowing demand.
Each time that Farm Equipment surveys dealers used equipment continues to be among their biggest worries. The past effects of Section 179 Bonus Depreciation has filled dealer's lots with a large number of relatively new, low hour tractors, combines and other equipment and these units have had an effect upon the sale of new equipment.
Net cash farm income (NCFI) and net farm income (NFI) are two common measures of farm sector profitability. NCFI includes cash receipts and farm program government payments less cash expenses; it represents the net cash income available to farmers in a given year.
The Assn. of Equipment Manufacturers reported tractors under 40 HP experienced a significant increase in January shipments as compared to the January 2015 number, but retail sales dropped from 4,129 last January to 1,550 last month.
It should come as no surprise, but in its Feb. 9 Farm Sector Income & Finance report, USDA is again projecting that net farm income for U.S. farmers will decline for the third year in a row.
Net farm income is forecast to decline for the second consecutive year, after reaching recent historic highs in 2013. NFI is expected to fall nearly $33 billion (36%) from 2014’s estimate to $58.3 billion in 2015. The 2015 forecast would be the lowest since 2010, and $29.1 billion below the 10-year average.
According to AgriBank's Insights newsletter, the current market conditions and resulting long-run forecasts suggest we are in the beginning of a down cycle in economic returns primarily for crop production, the largest segment of agriculture across the 15-state AgriBank District.
Conventional wisdom would tell us, no. Now is the time to avoid the risk that comes with a soft market and wait until business picks back up. This kind of sounds to me like trying to time the stock market: take your best educated guess at when things will pick up or fall off and hope you guessed correctly.
In this episode of On the Record, brought to you by Associated Equipment Distributors, we look at President Trump's tariff reduction on ag equipment, the latest dealer sales forecasts, and how high input costs are keeping farmer sentiment down.
Since 1980, A&I Products has become a leading manufacturer and wholesale distributor of aftermarket replacement parts for the agricultural, turf, and industrial equipment markets. A&I Products' experience and expertise has greatly contributed to the company's reputation as a top supplier of quality, reasonably priced parts. Founded with roots as a small machine shop and repair facility, the company made the transition by manufacturing new parts to replace those that were identified as commonly needing repair. Throughout the 1980s, the company quickly garnered a reputation for offering quality parts at a reasonable price.
Built on 90 years of expertise, Yetter Farm Equipment leads the agriculture industry in designing effective and innovative equipment for residue management, seedbed preparation, precision fertilizer placement, harvest attachments, strip-tillage, and more.
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