Ag Headlines, Wednesday September 30, 2015

Rabobank Report Suggest Consolidation in Machinery Industry

A recent study by Rabobank suggests the agriculture machinery industry could be headed for consolidation. DTN reports the study suggests we are about to see manufacturers merge, buy smaller companies and/or expand their offerings to include product lines not usually found on your local tractor dealer's lot. The report, titled Contraction Today, Consolidation Tomorrow, says “consolidation in any sector or industry is a logical, natural response to difficult operating conditions or declining growth.” Lower commodity markets have led to less farmer spending. The Rabobank report concludes that the downturn in equipment sales is both severe and persistent and that it will result in a reshaping of the industry. The report suggests three scenarios, being mergers, acquisitions and branching out into new product lines.

Propane Inventories at All-Time Highs

U.S. inventories of propane have reached the highest level in 22 years, spanning the reach of data collected by the Energy Information Administration. U.S. inventories of propane and propylene reached 97.7 million barrels earlier this month. Propane saw a record price jump just two years ago when inventories and shipping problems hampered the industry. Propane is primarily used in agriculture for grain drying and for livestock building heating. The Rural Lifestyle Dealer reports that as the production of propane has grown, the ability to transport, store, and export the commodity has expanded. EIA's September Short-Term Energy Outlook expects propane and propylene inventories to begin the October heating season at record levels, reaching a high of 99.1 million barrels at the end of September. The EIA will release its complete winter fuels outlook next Tuesday.

Increased Activist Activity Warned Friday

The Animal Agriculture Alliance has sent an alert to the food industry regarding increased activist activity on Friday for the upcoming World Day for Farmed Animals. While the event has been occurring yearly since 1983, sponsored by the Farm Animal Rights Movement, the Alliance wants industry professionals to be prepared for a potential increase in activist activity both online and in person, according to Meatingplace. Protests are scheduled outside Oscar Mayer and Mayflower Poultry facilities as well as candlelight vigils at current and former slaughterhouses. The Alliance does not recommend direct engagement on the event's social media or with activists participating in protests or demonstrations. Instead, the Alliance recommends a focus on promoting positive information about the industry.

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