Posted by ss55 on February 21, 2022 at 10:17:17 from (96.42.227.92):
In Reply to: New tractor sales posted by moresmoke on February 21, 2022 at 09:38:59:
When I worked for factory equipment manufacturers the rule of thumb was: When our customers production went up ten percent our sales went up 100 percent and we were scrambling to hire people and add capacity to meet the demand. When our customers production went down ten percent our sales dried up, we laid off most of the staff, cancelled leases on excess buildings, sold off unneeded machinery and still lost money just trying to keep the door open waiting for the next up turn in the business cycle.
Right now farm commodity prices are high, farm income is very high, everyone and his brother wants to farm or expand the farm and they are all bidding up the price of farm inputs faster than manufacturers can meet the new demand. When farm commodity prices do eventually fall again (like in the 1980s) marginal producers and investors will drop out, no one will want to invest in farming and manufacturer sales and profits will be way down too.
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