How Dollar Currency Rates Affect The Prices Of Agricultural Machinery

It’s a staggering and perhaps even slightly concerning fact that over 90% of the agricultural equipment used ‘down under’ is manufactured overseas. However, the purpose of this brief article is not to talk about the status of our manufacturing industries but rather more to deal with the occasional misconceptions about how Dollar exchange rates affect the cost of new agricultural machinery.

Strong currency-reducing prices/ Weak currency-rising prices

For a long time, the assumption was quite simple. If our Dollar was low, then the price of agricultural machinery went up. Conversely, if it was relatively strong, then prices fell. That sounds intuitively right and to some extent there is some mathematical basis for it but things just aren’t as simple as that.

Here are a few things to consider as to why you can’t always draw a direct line

between currency rates and the price of your agricultural machinery:

1. Currencies can fluctuate a lot over relatively short periods of time. If there were a direct responsive link, the prices at retail outlets would be constantly going up and down like a yo-yo.

2. Currency fluctuations are a nightmare for major businesses including those associated with the manufacture and supply of agricultural equipment. Their accounting and profit forecast calculations start to become of horrific complexity, so they take steps to reduce their vulnerability to change in response to currency variances through things such as forward ‘fixed rate’ currency exchange contracts.

3. The items you see for sale in the warehouses and outlets today were in fact purchased based upon commercial agreements made a long time ago when currency rates may have been very different. That’s necessary because it can take several months for manufactured equipment to get through a production line overseas and be shipped to us.

What does this mean for purchasers?

The bottom line really is that there is no need to hit the panic button and rush out to start buying your agricultural machinery and related equipment the moment you see a deterioration in the strength of our Dollar versus a bucket of other global currencies.

By and large, these variations in pricing have been smoothed out by some of the various strategies touched on above.


Now there is one exception to this and that arises from the prospect of a long-term systematic change in the strength of one currency versus another. In those situations, the ongoing effects start to push economics notably in one given direction and that can have a very significant effect on prices, one way or another, over the medium to long-term. So, for example, if we saw a long-lasting and steady decline in the value of our Dollar then you might expect that to feed through into higher prices for our agricultural equipment – plus everything else we import of course. It’s worth bearing in mind though that the reverse could also be true. Some cynics and critics of the capitalist system point out that it doesn’t matter which way currencies move against each other, the result is always higher prices and bigger profit margins for the companies concerned! Whether you believe that must of course be a matter of personal choice but for the majority of ordinary farmers, short-term currency fluctuations in the marketplace should not have a significant effect on the pricing of agricultural machinery.

Why Investing in Long-Term Wood Plantations Is a Good Idea

Did you know the best ships and boats in the world use a type of wood called “Teca” for the floor construction? Did you know millionaires buy “Teca” to make their home furniture and their house floors?

“Teca” is a type of wood that is planted in tropical weather. The approximate cycle time is of 20 years from planting to harvesting. Even though this is a large time period, it is considered one of the most profitable businesses in the agricultural industry. In fact, the demand of this product is so high, that traders from Eastern countries like India go to South America to buy this wood and ship it to their nations.

People who tend to invest in this business are usually individuals that are looking to have a family business and pass it from generation to generation. However, this is a business with one and only one purpose: Investing in order to have long-term income and profits. Therefore, “Teca” growers do not have plantations looking for a short-term monthly income. Usually, people in this industry have an additional job or business for their living, and think of the “Teca” plantation as their savings for retirement or to pass the business to their next generations.

In terms of maintenance and daily work, this plant does not require much of it. The key time are the first years after the first planting cycle in which care and fertilization must be provided. After that, the tree grows by itself without much job to be done. Another important detail is that after the first harvest, a new plant is naturally regenerated, with better quality and less care needed.

When talking about selling and distribution, there is nothing to worry about. Buyers will come by themselves looking to buy, so this is not a business that requires having a lot of contacts and networking.

The main reason of why this business is so profitable is that there is too much demand and very few supply because most people do not have the necessary amount to invest. The ideal project would be to have your own land and plantation. However, there are many traders and companies looking to sell shares of an existing plantation. Nowadays, this last method is being very common because people do not have enough money but they know and belief in the business wellness and prosperity. In fact, in the last decade, South American farmers and executives with savings have been looking for land and plantations of “Teca” more than ever before in order to invest their money.

Additionally, due to the prosperity and growth of the business, people are looking to become expert forest engineers. Even though this plant does not require of much attention, it is fundamental to have an established project with statistics, measurements and details. This work is done by such forest engineers and hence the reason of people wanting to become one.

Again, this is a long-term business that will not provide any gain or income in the present. However, think about it. If you want to invest your savings and earn more money from it in the future, “Teca” is a great option that should be considered.

Investment Advice You Need to Know

Investments can be helpful in achieving financial stability. They should be explored by people who are planning ahead. Good advice in this area can assist in choosing the best investment tool to use. There are a number of investment instruments available for people to take advantage of; however, prudence must be exercised when choosing. This article will act as a guide in assisting individuals to make the right choice, and also, to provide information you need to know.

An investment can be defined as the commitment of money or capital to purchase financial instruments or other assets to gain profitable returns in the form of interest, income or increase of the value of the instrument. Investments includes, using the good produced or its money equivalent, to create a durable consumer or producer good or the investor may choose to lend the original good to another in exchange for either interest or a share of the profit.

How can we be successful at investing? Well, we must first have the desire to invest. After acquiring the desire, we need to be motivated to save, no matter how small the amount. The fact is that emphasis should not be placed on the amount being saved, but rather; how often it is being done. After we have mastered the art of saving, the next step is investing. It is incumbent on persons to educate themselves on the subject so that they will be able to make an informed decision.

Financial investments can be extremely beneficial to individuals who seek good advice on identifying a good investment product. With this in mind investors can apply certain principles in order to benefit from their work. First of all, investors need to invest with a margin of safety. This principle is particularly useful when seeking to identify safe investments, and involves the purchase of securities at significant discount to its intrinsic or true value. Applying this principle can benefit the investor in two ways, for one, it may provide high return investment opportunities; it may also minimize the downside risk of an investment.

High return investment products are usually sought after by investors, however, individuals need to be aware that there are certain strategies that when applied, can increase the rate of return on their investment, these includes; increasing savings; investing in a manner that will result in a reduction in the amount of tax paid; invest in a variety of safe investment products; getting involved in international investments, and doing a revision of your portfolio’s performance each year.

Investment options will always be available for investors to take advantage of. These options, when carefully selected, can provide a steady source of income. It is the responsibility of each investor to do the necessary research and seek the necessary professional advice to land a good investment.