UBS Securities is out with preliminary results of its 20th Agricultural Dealer Survey, which shows that farm equipment dealers still expect lower farm machinery sales this year, as dealer optimism has continued to decline over the past 6 to 12 months.
UBS said dealers noted higher input costs (especially energy), rising interest rates and softness in some commodities prices as negatives, but singled out ethanol prospects as a positive. The survey, which attracted more than 400 responses, also showed dealers think farm-bill negotiations create uncertainty and dampen equipment demand.
Given the results, UBS now says the negatives cited may more than offset the recent strength in farm commodity prices and the optimism surrounding increased demand for ethanol.