While USDA raised its outlook for farm cash net income for 2013 by 7.4% over its August estimate, it still represents a 3.4% drop from 2012 levels. USDA raised its 2013 U.S. farm cash net income forecast to $129.7 billion, up from $120.8 billion in its August forecast and $123.5 billion in its initial February forecast.
There's little doubt that escalating commodity prices since 2007 have resulted in higher farm incomes and fueled a steady rise in farm machinery sales.
While opinions vary on the impact the drought will have on farm equipment sales for the rest of this year and next, most analysts agree the lower yields will result in higher commodity prices. This combined with the wider use of crop insurance is likely to blunt a major falloff in ag machinery sales in 2013.
So far, so good. According to the latest (September 10) report from USDA, agricultural commodity prices are on the rise and look strong for the last quarter of 2010 and going into 2011.
Farm equipment makers know that when commodity prices rise and farmers have extra money in their pockets, they will invest it in the tools of their trade.
While commodity economics remain a bit "iffy" going into the last half of 2010, the trend toward higher prices along with lower farm inputs are pointing to a good potential for strong equipment sales through year end.
In this episode of On the Record, brought to you by Associated Equipment Distributors, we take a look at CNH Industrial’s goals for growing its precision business by 2030.
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