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 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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