Optimism in Machinery Market

Investment research firm Morningstar, Inc., has released an industrial report that suggests good news for ag.

While the report led with the bad news—lower farm incomes, less willingness among farmers to buy equipment, and an unclear timeline for recovery—it offered reason for optimism.

“We believe long-term factors provide upside to the space,” the article said. “Calorie consumption is growing, and emerging countries have shown increasing willingness to utilize agricultural mechanization. Various regions across the globe maintain staunch support for government crop insurance and subsidy programs, and producers of seeds and pesticides are continuously working to increase crop productivity. Thus, although short-term headwinds are clear and causing unrest, latent pockets of optimism lead us to conclude undervalued opportunities are present for stakeholders.”

Source: Morningstar