Depreciation of dollar can be good for tractor makers

The chairman and chief executive of Titan International, the tyre manufacturing firm, has observed that the depreciation of the US dollar, in relation to other farming countries, is actually proving beneficial for the America's market for farm machinery.

Maurice Taylor said that although Brazil had become a major competitor to America, when concerning output of cotton, soybeans and corn, the farmers in Brazil are 'fighting' a currency that is appreciating. Mr Taylor said, Remember, a few years ago the Brazilian real conversion rate to US dollars was 4:1. Today it is 1.8:1. Therefore, it's a great time for the American farmer. Therefore, the fact that American farmers are in a very profitable state, will 'support farm equipment purchases'. He says that John Deere and Fendt tractors could become the 'big' winners. Large farm is running good and we believe it will go on for a few more years because corn, soybeans, cotton and wheat all use big equipment, said Taylor.

Titan International itself, which provides tyres for John Deere and Fendt, revealed a rise of 11 percent between April and June. The operating profits rose by 35 percent, although this was helped by cuts to the research and development department. The total earnings came in at $0.12 per share, which was fractionally ahead of the projections, which was $0.11.

Mr Taylor also said that the Titan International was set to stay on track to meet its financial targets for the year, on the mid-to-high side if business keeps going as it is today.