Ag Headlines, Monday November 30, 2015

Under 40 Horsepower Tractor Sales Increase

The Association of Equipment Manufacturers reports sales of under 40-horsepower tractors jumped 23 percent in October compared to last year. That represents an eight percent increase for the year. AEM Senior Vice President Charlie O'Brien noted that many of these tractors are going into small-acre farms and the livestock sector, where economic conditions have been more favorable compared to row crop operations. Sales in the two-wheel drive 100-horsepower and above category dropped 29 percent for the month when compared to October of last year, resulting in an overall reduction of 23 percent this year.

El Nino's Impact Beyond Agriculture to Cost Billions

Outside of the agriculture industry, El Nino is expected to cost billions of dollars. CNBC reports the impacts of the weather event are likely to reach the energy sector as well. The El Nino of 1997 to 1998 caused an economic impact of $30-$45 billion and it's likely to be higher this time round as economies have grown since then. The El Nino weather pattern, which is expected to strengthen further through the end of the year, is on track to be one of the three strongest such patterns in almost 70 years. While El Nino may give a boost to commodities like grains and livestock, it will be negative for natural gas prices as the weather phenomenon will give rise to a slightly milder than normal December in the world's largest natural gas consumer, being the United States.

Tyson Forecasts another Year of Record Profit

Tyson Foods expects another year of record profit following better-than-expected revenue in its latest quarter. The Wall Street Journal says the earnings report shows strength in chicken and pork operations. Tyson Foods said the chicken segment registered a sales volume climb on stronger demand. Tyson, the largest U.S. meatpacker by sales, projected healthy earnings in its chicken and pork operations despite rising supplies of the meats and continued fallout from high pathogenic avian influenza. The company also raised its anticipated cost savings from last year’s acquisition of Hillshire Brands, which gave Tyson a much bigger footprint in packaged foods. The report comes with a positive outlook despite weakness in the company’s beef operation and sluggish export markets. Tyson executives said their projections for its fiscal year that began in October assumed that prices for chicken would stay low, that trade barriers related to bird flu would remain in place, and that the U.S. dollar would remain strong.

NAFB News