Market watchers said a report from the U.S. Department of Agriculture due out today on spring planting intentions will show an increase in soybean acres over corn and expected declines in cash receipts will drive down demand for new farm equipment.
U.S. farmers and agribusinesses are expected to purchase fewer tractors and combines this year by 5 percent and 15 percent respectively, according to estimates.
The USDA said it expects cash receipts to fall 9 percent from 2008 to $295 billion. Falling commodity prices on corn and other major cash crops will likely cause U.S. farmers to pull back on spending on new farm equipment.
U.S. and European farmers are still faring better than those in other countries, particularly Asia, where the credit crisis has left many small farmers without the ability to get loans.
The United Nations Food and Agriculture Organization said close to a billion people globally could go hungry this year without assistance from the international community.
U.S. farmers continue to have adequate access to credit and economists said their debt-to-asset ratios are the lowest in 40 years.
Farm equipment manufacturers should anticipate currency issues, reduced access to credit and smaller crop yields to impact farm equipment sales in South America and Europe, according to Dow Jones Newswire.
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