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Farm Equipment
Text Box: In general, when farmers receive more money for their crops or livestock they make a higher profit. As their profit goes up, they have more money to spend on new farm equipment. One caveat to this is that some crops are heavily subsidized by the government. so, in the short run price fluctuations may have nothing to do with actual economic conditions. But, over the long rung, as the chart below shows, the prices that farmes are paid for their crops or livestock is a leading indicator of farm equipment industrial production. On average, changes in the prices paid to farmers lead changes in farm equipment industrial production by eight months. Current Comment - The rate of change in prices received has been in an accelerating growth mode since November 2006. As the politicians continue to push for alternative energy sources from agricultural products the prices paid to farmers should continue to rise. So, farm equipment industrial production should go back to an accelerating growth mode soon.
Sources
Prices Paid Index
Industrial Production
For more information contact Steve Kline, Jr., financial analyst.
513-527-8800
skline2@gardnerweb.com
Links to other Financial Data from Gardner Publications, Inc.
2008 Capital Spending Survey and Forecast Results
Metalworking Business Index
2008 Capital Spending Survey and Forecast Demographic Reports 
Current and past surveys conducted by Gardner Research
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