News Briefs.

$8.3 billion for short-term relief

Direct emergency payments to farmers, authorized by the fiscal year 2000 appropriations bill, amounted to $8.3 billion, with $5.5 billion going toward payments for emergency income loss. The bill also contains a provision allowing farmers eligible to receive PFC payments (also called AMTA payments) in fiscal year 2000 to receive the payment all at once or in two equal payments during fiscal year Oct. 1, 1999 through Sept. 30, 2000.

However, this aid package only offers short term relief, according to Edward Smith, professor and agricultural economics specialist for the Texas Agricultural Extension Service. He warned that if prices for major crops remain at levels experienced over the last two years, then liquidity issues will continue to plague the nation's farming community.

"While this year's emergency package did significantly improve the ability of farmers to cash flow in 1999, it does not solve the longer term problem of low prices," he said.

New "crop" may boost farm income by billions

A Canadian utilities consortium plans to pay US farmers to keep carbon in their fields and out of the atmosphere. The program will allow farmers to earn "carbon emission reduction credits" by trapping carbon dioxide in their soil through conservation practices. The consortium will then purchase the farmers' credits to offset the carbon dioxide emissions created by the utilities.

The program will be tested in Iowa beginning next spring -- and it's a test that could earn Iowa farmers as much as $100 million, up to $3 per acre, the first year. The amount of money paid for the credits will depend on the type of practice farmers use to trap the carbon and the length of time they agree to be involved. The program is expected to go nationwide after its Iowa test. The driving force behind such a program is a pending international agreement which requires reducing greenhouse emissions below 1990 levels.

An emissions-trading system already exists for sulfur dioxide. However, this it the first agreement that brings agriculture into the new emissions-trading market for carbon dioxide. Emissions trading holds enormous potential for billions of dollars in farm income, according to Richard Sandor, spokesman for Environmental Financial Products Ltd., Chicago, IL.

Dealer network expects 1999 revenue to be even with 1998

Texas Equipment Corporation, an eight-dealership John Deere network in West Texas and Eastern New Mexico, said it expects revenue for 1999 to be the same or slightly better than last year's $68 million, despite a projected 30-35 percent industry-wide downturn in farm equipment sales. Revenues for the first nine months of 1999 are roughly $49 million, the same as last year's comparative period, despite a 17 percent, or $8.2 million, reduction in same-store sales.

More farms have Internet access

Of the more than two million farms in the US, 47 of them have access to a computer, and 29 percent have Internet access, according to the Department of Agriculture. On-farm computer use has risen from 38 percent in 1997 to 47 percent in 1999. Larger farmers appear to be using computers faster than smaller operations. About 77 percent of US farms with annual sales of more than $250,000 have access to a computer, and 52 percent have Internet access.

Equipment sales up in Australia and UK

The Tractor and machinery Association of Australia reports that sales of most lines of farm machinery and equipment were higher in the first half of the year than forecast last February. Suppliers of sprayers, cultivation tillage and seeding equipment, hay tools and front end loaders experienced strong sales. Australia's growing wine and horticultural industries and the increasing number of farmers switching from livestock to grains and cotton have stimulated increased demand for tractors in the 90kW and under range. These better-than-expected sales have provided dealers the opportunity to reduce inventory levels, although there is some concern with the amount of used equipment on hand, particularly in broadacre areas.

In the first nine months of 1999, agricultural tractor registrations in the UK increased 13.5 percent more than the same period of 1998. A total of 9,269 units with more than 40 hp were counted in the cumulative agricultural tractor category.

EMI elects chair

Richard Christman, Case Corporation's senior vice president for strategy and corporate development, was elected the 1999-2000 chairman of the Equipment Manufacturers Institute (EMI). Other EMI officers include: vice-chairman - Robert Vermeer, chairman and CEO, Vermeer Mfg. Co., Pella, IA; second vice-chairman - Dennis Eagen, president and CEO, Volvo Construction Equipment N.A., Inc., Asheville, NC.; vice-chairman (agriculture) - Gary MacDonald, executive vice president, MacDon Industries Ltd., Winnipeg, MB, Canada; vice-chairman (construction) - David Woods, CEO, Charles Machine Works, Inc., Perry, OK. Robert Alonzo, vice president sales and marketing, Steel Parts Corporation, Tipton, IN, was elected new EMI Supplier Council president and will be the group's representative to the EMI board of directors.

Moratorium on mergers defeated

Sen. Paul Wellstone (D-MN) hoped to get Congress to impose an 18-month moratorium on agribusiness mergers and acquisitions in which one of the parties had assets of more than $100 million and the other had more than $10 million. A November 17 vote in the Senate defeated Wellstone's bill, 71-27.

Wellstone said conglomerates were overpowering family farmers in the fight for profits. "We are at a point where we have to raise a lot of cain before Congress is going to take action.... we need a new farm policy, and we need it now."

The senator said he would make another effort to pass moratorium legislation when Congress reconvenes in January.

Quarterly financials reported

* AGCO Corporation reported third quarter net sales of $570.5 million and net income of $7.5 million, or $.13 per share, compared to 1998 figures of $665.7 million net sales, $17.9 million net income, or $.30 per share. For the nine months ending September 30, net sales were $1,815.6 million and net income was $15.8 million, or $.27 per share, compared to $2,183.3 million, $82.9 million, and $1.35 per share, respectively for the same 1998 period. Because the adverse market conditions have reduced net sales and net income, compared to previous years, the company says it has aggressively focused on cash flow generation by adjusting production schedules to remain below forecasted retail demand and by implementing significant operating cost savings initiatives.

* Case Corporation reported a $3 million net loss for the third quarter -- worldwide revenue of $1.3 billion, down from $1.5 billion for third quarter 1998. Per share net loss was $.04, compared with a profit of $.82 in 1998. For the first nine months of 1999, the company had revenues of $3.9 billion and net loss of $15 million, or $.24 per share, compared with revenues of $4.6 billion and net income of $258 million, or $3.30 per share for the same period last year. Case says further sales declines in agricultural equipment are expected, especially combines and row-crop tractors, for the rest of 1999. The company plans to continue production cuts to maintain inventory levels for both agricultural and construction equipment.

* Deere & Company reported worldwide net income of $239.2 million ($1.02 per share) for the year ended October 31, 1999, and a net loss of $29.5 million ($. 13 per share) for the fourth quarter, compared with $1.021 billion ($4.16 per share) for 1998 and $162.1 million ($.71 for fourth quarter 1998). Worldwide agricultural equipment had operating losses of $51 million for 1999 and $129 million for the fourth quarter, compared with operating profit of $941 million and $102 million, respectively, in 1998. Worldwide construction equipment operating profit was $149 million for 1999 and $15 million for the fourth quarter, compared with $326 million and $53 million for the same periods in 1998. Retail sales remained at favorable levels during fourth quarter 1999 quarter, while company sales and production volumes declined as dealers reduced inventories.

* Gehl Company reported record net sales of 69.8 million and net income of $6.1 million, or $1.00 per diluted share for its third quarter ended October 2. Sales were 10 percent higher, and earnings were 50 percent higher than the $4.1 million, or $.61 per diluted share reported for the third quarter of 1998. For the first nine months of 1999, net sales were $222.6 million, an increase of 11 percent above the $200.0 million for the same period in 1998, and net income was a record $16.4 million, or $2.52 per diluted share, compared to $11.9 million, or $1.79 per diluted share, an increase of 37 percent. The company said its agricultural equipment sales benefitted from favorable milk prices paid to dairy farmers and construction equipment sales benefitted from relatively low interest rates, a strong residential construction market a tight labor market.

* New Holland reported a third quarter rise of two percent in net revenue to $1.3 billion, while net income fell to $39 million, or $.25 per share, from $57 million, or $.33 per share. The company says the rise in revenue was helped by its 1998 purchase of the German excavator group Orenstein & Koppel. New Holland officials say the group's geographical and product spread has helped the company cope with tough market conditions, that group restructuring launched last year had softened the impact on profits and that tight control of operating costs and reduced overheads in the base business have been brought to below 1998 levels.