Business of buying department
Oct 1, 2003 12:00 PM
Roundup Ready price increase
Expect to pay more for your Roundup Ready (RR) corn and soybean seed in 2004. Monsanto reports the suggested retail price on its RR corn seed will increase on average about $3/bag and the price of RR soybean seed will go up $2/bag. That represents a 2% markup on corn and 10% on soybeans. (Reuters)
AGCO buys Valtra
Mahindra has lost its bid for Finnish tractor manufacturer Valtra. AGCO is the winner. Reports from Europe on September 10 indicated a sale price of 600 million Euros, which translates to just more than $670 million in U.S. dollars. That price nearly doubles Mahindra's reported offer, but is still considerably less than Valtra's 2003 one-year sales as of June 30, 2003, which totaled $900 million.
Initial statements from AGCO indicate that it intends to keep Valtra intact, including factories in Finland and Brazil and its 2,400 employees. Valtra has been the fastest-growing tractor company in Europe and is developing a significant presence in Latin America.
Natural gas price rise?
Though energy prices are notoriously hard to predict, the consensus among experts is that demand for natural gas will pressure supply for at least the next year. For farmers, higher natural gas prices will mean higher anhydrous ammonia prices and grain-drying costs. Primarily to blame is a combination of increased natural gas use for generating electricity and declining stocks of domestic natural gas supply.
A July hearing of the Senate Energy and Natural Resources Committee found that natural gas prices in the months ahead are likely to range from $4.50 to $9/mm Btu, but some economic forecasters report that prices could exceed $15. If prices remain high, more electrical production could shift to coal and nuclear power. And liquid natural gas might be imported. The primary price indicator is still likely to be the depth of cold of the U.S. winter.
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