News Briefs.

Buhler/Weidemann wants to buy New Holland assets

Buhler Industries, Inc., with partner Weidemann GmbH & Co. KG of Germany, wants to purchase the Winnipeg operations of New Holland Canada Ltd. The Canadian production facility was among New Holland's assets which regulators ordered sold by April 1, 2000, in the company's recent acquisition of Case Corporation.

Craig Engel, Buhler's COO, told Implement & Tractor that New Holland had been notified of Buhler's interest back in November, soon after the announcement of approvals for the purchase were announced by European and North American regulators. Buhler has received the Information Memorandum detailing the bidding process.

Buhler's core business is designing, manufacturing and distributing agricultural equipment throughout North America. The company also distributes a series of Buhler/Weidemann industrial wheel loaders throughout North America. If the company's bid is accepted, the lines would likely be integrated into the New Holland factory in Winnipeg, according to Engel.

"Buhler is pursuing the offer. We are looking at the whole operation, plant and products, including the Genesis 2WD and Versatile 4WD tractors which also have to be sold," he told I&T.

2000 net farm income will decrease $7.6 billion

Large supplies of grain, a result of four consecutive years of large world harvests coupled with low commodity prices, will lead to a projected US net farm income of $40.4 billion in 2000, down $7.6 billion from the amount estimated in 1999, according to the USDA. This will be a five-year low. In 1999 commodity prices led to a drop of $1.7 billion in total crop receipts, and the $93.3 billion income was the lowest amount recorded since 1994.

Receipts for 2000 are expected to be down $2.1 billion for major field crops, with fruit, vegetable and greenhouse/nursery products rising $1.2 billion. Net cash income is forecast at $49.7 billion, which is $9.4 billion less than the preliminary estimate for 1999.

Corn, sorghum, soybean, rice and cotton prices are all expected to be below the cost of production, which will cut into net income of crop farmers especially, according to Dr. Carl Anderson, an economist with the Texas Agricultural Extension Service.

Drought in the forecast?

A major drought may be looming for 2000, according to Doane Agricultural Services meteorologist Bill Nelson. He is concerned about a strengthening and lingering La Nina, which historically correlates with below-average rainfall during key growing months.

Nelson said if La Nina persists into the summer of 2000, it could mean elevated drought risks for this year's summer crops.

"This progression of events is how many major US droughts of the century have evolved," he said.

During the past 50 years, several long-running La Nina periods have been recorded. The three-year weather event of 1954-56 resulted in extreme drought to the southern Plains and western Midwest. Another La Nina began in the summer of 1973 and lasted until the spring of 1976, with the Corn Belt receiving below-average rainfall in 1974, 1975 and 1976.

The most recent drought example associated with La Nina was the severe 1988-89 drought, which began in the fall of 1987.

Nelson said a La Nina-caused dry October may correlate with the amount of rainfall the following summer. He said he would be closely watching the amount of July rainfall in Iowa, which is the most important month in determining corn yield prospects and a major factor in soybean yields. The records show that each of the eleven years during the 20th century when October rainfall averaged less than one inch in Iowa, as it did in 1999, were followed by record below-average rainfalls in July.

PIMA expands breadth and scope

PIMA, Agricultural Manufacturers of Canada, is the new name of the former Prairie Implement Manufacturers Association, which originated as an organization for manufacturers in Western Canada.

The organization announced that it has removed the locale exclusionary clause from its constitution and will be a national agricultural equipment manufacturers association.

PIMA president Larry Schneider said the organization intends to work with other groups with agricultural manufacturing interests to lobby with governments across Canada to develop policies that meet the industry's needs and to provide technical, safety and general information to its members.

"Significant tradition and innovation has been developed in the sheds and shops of our membership" said Schneider. "World class technology has ventured from a cold winter night into fields of farming communities in every arable continent of the world.

"We have much to be proud of; we still have much more to achieve. Our mark will be felt wherever feeding the world is an issue."

Irrigation value is up

US farmers spent more than a billion dollars on irrigation equipment, facilities and land improvements in 1998, according to the USDA's latest Farm and Ranch Irrigation Survey. This was a 25 percent increase over 1994 when the last survey was conducted.

The amount of irrigated cropland acreage remained steady, while the value of irrigated crops as a percent of all crops rose substantially during that time period. Corn accounts for about 25 percent of irrigated land. Alfalfa hay, cotton, soybeans and orchards round out the top five irrigated crops. The report said these five crops make up 57 percent of all irrigated land.

FEWA plans inventory clearinghouse

Member firms of the Farm Equipment Wholesalers Association can list excess inventory in the organization's third edition of the Inventory Clearinghouse, which will be available in March. Listing information about the items offered will include manufacturer, model, type, specifications, list and net price, condition and quantity available. The Inventory Clearinghouse is a good way to move old and unneeded stock after year-end inventories, according to Patricia A. Collins, executive vice president of FEWA, whose office is coordinating the project. Listing forms are available from the FEWA office, ph: 319-354-5156; fax: [phone].

GMO uncertainty looms

Opposition to genetically modified crops (GMOs) will likely continue to grow in both foreign and domestic markets, according to the American Corn Growers Association (ACGA).

"Since last March, US trading customers in Europe, Asia, India, Brazil and Mexico have been very clear in their refusal to purchase GMOs," said Gary Goldberg, CEO of the ACGA. "It is time our governmental leaders and grain exporters recognize this opposition and act accordingly.

Major European supermarket chains are now rejecting genetically modified food products. In Asia, major beer breweries and Japan's largest flour miller have announced that they will stop using ingredients produced from GMOs. Mexico's largest tortilla maker will no longer purchase GMO corn. To supply the world with non-GMOs, Brazilian farmers recently ripped out GMO soybean seed crops, Goldberg said.

ACGA is predicting a reduction of 20 to 25 percent in GMO planted acres. "After all, can farmers afford to plant a crop in the spring that may not be marketable in the fall?" he asked.

Ag equipment shares NOx blame

Agricultural, garden and construction equipment got part of the blame for the increase in the emissions of nitrogen oxides (NOx). A recent EPA report said NOx emissions from nonroad sources led to an overall increase of 5 percent in transportation NOx between 1970 and 1997, while automotive emissions dropped about 5 percent. Other non-road sources blamed for the increase in NOx are airplanes and airports, railroads and boats. The report said other pollutants, such as volatile organic compounds and particulate matter, dropped significantly during the past 30 years.

AGCO plants close

AGCO Corporation says the company chose to close its plants in Coldwater, OH, and Lockney, TX, for manufacturing efficiencies. The Coldwater facility has not operated since October, 1999. Products produced there will be manufactured in other AGCO facilities in North America and Europe. The Lockney plant, which was closed periodically during 1999, produced Tye branded seed drills and cultivation equipment. That equipment will be relocated to the HFI facility in Hesston, KS. The company says it cost $25-30 million to close the facilities.

Construction slows

Shipments of construction equipment for the third quarter slowed somewhat but were still ahead of the same period for the year before. The latest index from the Construction Industry Manufacturers Association (CIMA) shows third quarter 1999 gains of 4.1 percent over the same period in 1998, but a drop of 2 percent compared to the second quarter of 1999. CIMA president Dennis Slater said the slight drop was not unexpected, given the slight cooling of the overall economy and the recent slowdown in housing starts. The index covers 39 product types of construction equipment: crushers, cranes, asphalt pavers, cold planers, soil stabilizers, rock drills, horizontal feeders, screening equipment, portable air compressors, mounted breakers, concrete pavers, light towers and generators.

US & EU concur on HEI objectives

At a fall meeting in Berlin, representatives from the non-road Heavy-Equipment Industry (HEI) in the US and the EU participated in the fifth Transatlantic Business Dialog (TABD) to refine the industry's needs down to succinct objectives and move forward with them. The issues discussed centered around harmonizing US and EU regulations and standards for engine exhaust emissions, machine safety, outdoor equipment noise, road safety and whole body vibration.

The overall mission of TABD is for US and EU industry to arrive at a consensus position on critical issues where non-value-added, trade distorting regulations impede the free flow of goods in the market place and to encourage the respective governments to eliminate such problems.

Representing the US were Robert Vermeer, chairman, Vermeer Mfg. Co., Pella, IA; Bob Dreher, deputy general counsel, EPA; Eileen Hill, director, Office of European & Regional Affairs, US Department of Commerce; Ralph Grotelueschen, directory of safety, standards and environment, Deere & Co.; and Emmett Barker, president, Equipment Manufacturers Institute.

Projected growth of cereal production

It is essential that food production keep the rate of increase it has in the past if the world's population is to be fed in the 21st century, according to a report from the Institute for Prospective Technological Studies, a publication of the European Science and Technology Observatory Network.

Estimates are for the present 5.7 billion world population to increase to about eight billion in the next 25 years and as many as 12 billion by 2050, mostly concentrated in the tropics and subtropics, where agricultural land is already limited. The report says world food supplies will have to more than double by 2025 to cover demand in both quantity and quality.

The increase in meat consumption has been accompanied by a parallel increase in a country's economic growth over the last century. Today, about 500 million people worldwide have high meat consumption, and eating habits will continue to shift from primarily vegetarian to high-calorie, meat-based diets. Thus, indirect per capita consumption of cereals, of which seven calories are needed to yield one calorie of meat, is projected to increase by about 80 percent worldwide in the next 20 years and will be the driving force behind projected growth of cereal production.

Obviously, transporting and distributing food from net food exporters to importers will continue to need resolution. Today, an estimated 840 million people go hungry in the world, despite the fact that overall production would suffice for all.

New SS wage base

The new Social Security taxable wage base for 2000 will be $76,200, a $3,600 increase from the 1999 wage base of $72,600. The Social Security administration also announced that the Social Security tax rate will remain at 6.2 percent in 2000, with a maximum of $4,724.40 to be withheld from an employee's pay and matched by the employer. The rate for self-employed individuals will be 12.4 percent in 2000.

Changes at Fiat in 2000?

Fiat, the parent company of CNH, the merged Case IH and New Holland equipment companies and the world's seventh largest carmaker, is being actively courted by DaimlerChrysler AG, the world's sixth largest.

Both companies were quiet about the speculation of a Fiat car division sale or a joint venture, but a Fiat board member, lawyer Franzo Grande Stevens, indicated the timing for a possible car alliance, saying Fiat would decide this year whether to go for an alliance and with whom.