Mercer Capital’s Agribusiness Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to agribusiness professionals. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
This issue includes discussion on Agriculture Machinery, Equipment & Implements. Excerpting from the discussion:
The agricultural equipment industry enjoyed a strong run over the 2009 to 2013 period due to rising commodity prices, land values and crop yields, as well as the benefits of the economic recovery. However, the decline in farm income in 2014 depressed sales of agricultural machinery, a trend that is expected to continue into 2015. Lower commodity prices due to record high yields in 2014 will reduce the amount of disposable income available to producers to fund new equipment purchases and upgrades.
Net U.S. farm income is expected to measure $73.6 billion in 2015, a 32% decline from the 2014 estimate of $108 billion and the lowest level recorded since 2009, according to the USDA. The largest decline is expected for corn receipts, while smaller declines are anticipated for rice and cotton. Livestock was one of the better performing agricultural sectors in 2014 due to more favorable supply and demand conditions, although 2015 receipts are expected to be lower for that segment as well.
To read the entire write up, download the newsletter (pdf) here.