Falling farm income may hurt ag equipment makers

Drop in farm income may hurt agricultural equipment makers' sales, irrigation system suppliers

• On 10:44 am EDT, Friday August 28, 2009

NEW YORK (AP) -- The likelihood of a big drop in farmers' income this year is dimming prospects for sales of companies that supply such agricultural equipment as irrigation systems, an analyst said Friday.

The Agriculture Dept. said Thursday net farm income will fall this year to $54 billion, down 38 percent from the preliminary estimate of $87.2 billion for last year.

Further, the 2009 forecast is $9 billion below the average of $63.2 billion in net farm income earned in the previous 10 years.

Boenning & Scattergood analyst Ryan M. Connors warned that net farm income is a key sales driver of irrigation systems, including those made by Lindsay Corp.

He called the Agriculture Dept.'s decision to lower its income forecast -- its second such downward revision this year -- "troubling news for makers of irrigation equipment."

Besides Lindsay, other companies whose sales are at potential risk from falling farm income are Valmont Industries Inc. and Titan International Inc., Connors said.

In morning trading, Lindsay fell 46 cents to $43.71 and Valmont declined $1.45 to $84.69.