In a world where heavy equipment sales are stalling due to the housing slump and credit crisis, the farm market is a rarity: a place where demand is still outstripping supply and many customers are still paying with cash. The question is: How long can the agricultural market shelter the equipment companies from the financial tempest that has slammed into just about every other corner of the global economy, wrecking just about everything in its wake? In the case of Deere & Co and CNH Global NV the question is especially urgent because the companies also have large construction equipment units, which are already hurting as a result of the worldwide building downturn. Signs of potential trouble abound. Crop prices have tumbled, prompting some grumbling among famously tight-fisted farmers, whose willingness to buy equipment rises and falls with corn, soybean and wheat prices. Brazil, until now one of the fastest-growing agricultural markets and a key one for Agco Corp , is feeling the credit squeeze. Investors have fled the sector faster than cats from a barn fire. Shares of Deere, the world's No. 1 farm equipment maker, have lost more than 65 percent in the past six months and Agco and CNH are down as much or more from their 52-week highs. Terry Darling, an analyst at Goldman Sachs, is among the skeptics. He calls the sector's outperformance "unsustainable" because "weakness in ag commodity prices is likely to drive farmer income down" and discourage the purchase of new tractors and harvesters, which can cost upward of $300,000. COMPANIES UPBEAT The companies themselves are upbeat about their outlooks. After CNH reported better-than-expected third-quarter earnings late on Wednesday and raised its full-year forecast, company executives said that the strong demand they saw all year from farmers was continuing into the fourth quarter -- at least in North America -- despite the correction in commodity prices. The company, which is controlled by Italian automaker Fiat SpA , said that North American sales of tractors over 40 horsepower were up 40 to 45 percent in the first three weeks of October and that sales of harvesters were up 90 percent in the region during the same period. In a separate conference call, Fiat Chief Executive Sergio Marchionne said he expected buoyant demand for farm equipment to continue through a "good chunk" of 2009. FOOD'S PRIMACY Even if the world were to fall into a global recession, Deere remains optimistic about the fundamentals. At an agricultural conference earlier this month, Marie Ziegler, the company's head of investor relations, found comfort in psychology and demography. She said Abraham Maslow's so-called hierarchy of needs, a pyramid explaining human behavior and motivation, puts food at the very base, making it something so basic that people are ready to sacrifice almost everything else to have it. "Maslow's hierarchy," she said, "says that the last thing you do is you adjust your food, so we would expect to be much better protected" in a global recession. But then Ziegler pointed to sheer numbers on the side of agriculture, saying that "over 2 billion people" were eating better now and their continued consumption made Deere "feel very bullish on the outlook longer-term ... regardless of what might happen in the near term." Unfortunately, hungry mouths do not buy tractors. Farmers do. And those farmers are less flush today than they were just a few months ago. Prices for their crops have tumbled from the highs of earlier this year. Corn futures have fallen by 49.5 percent since hitting a record high of $7.65 a bushel in June, soybeans are down 46.9 percent since hitting a record $16.63 a bushel in July and wheat futures are off more than 29 percent in the last five months. If the trend continues, Ann Duignan, an analyst at J.P. Morgan, said she is not optimistic because "farmers are likely to take a more cautious view of spending in 2009." One reason for that caution? Duignan estimates that at current prices, U.S. growers will make money in 2009 -- but only if they own their land. At current futures prices, "crops raised on rented property do not yield a profit," she said.

Export growth is expected to fall sharply in coming months, dimming what had been one of the few bright spots for a sputtering U.S. economy. Many U.S. producers are already seeing a slump in new orders and growing hesitation on the part of foreign buyers to move forward on previously negotiated deals. The outlook has dimmed so quickly that economists are having a hard time keeping their projections current. Global Insight, an economic forecasting and consulting firm, announced on Friday that it was nearly halving its projection for fourth-quarter real export growth to 0.73% from 1.34%. "But what we've seen in the last few days suggests we'll see even more trade deterioration," said Paul Bingham, the group's trade economist. Mr. Bingham said a global recession is now all but certain, which will take a bite out of all types of trade. U.S. export growth was already slowing before financial markets went into a tailspin, as a result of more-modest economic growth in many regions of the world and an upswing in the value of the dollar. A stronger dollar makes U.S. products less competitive in foreign markets. Much of this year's export boom was driven by surging prices for commodities such as iron ore and soybeans, fueled in part by a wave of infrastructure spending world-wide by countries rushing to expand rail networks, mines and power plants. This benefited U.S. producers of mining machines, cranes, tractors and conveyor belts. U.S. coal exports surged, as did shipments of diesel engines, computers and scrap metal. The events of recent weeks have pushed down commodity prices and raised doubts about the future strength of these markets. Exporters are also getting burned by slumping U.S. consumer spending. A slice of U.S. exports feeds a circular dynamic in global trade, with foreigners snapping up U.S.-made machines, chemicals and parts to make products that are ultimately sold in U.S. stores. Consider guitar strings. D'Addario & Co., based in Farmingdale, N.Y., is a major producer, selling strings both in retail stores across the U.S. and overseas, as well as to factories, mostly in Asia, which make guitars sold by U.S. retailers. James D'Addario, the company's chief executive, said string exports to Asian factories surged 40% earlier this year, in part, he believes, to ramp up for the Christmas season, which had been expected to be strong for guitars. A big part of that demand is due to the the latest version of the Guitar Hero video game. But as U.S. consumers, nervous about their jobs and savings accounts, slash spending, the chances of strong holiday sales have dimmed. "I'm expecting there'll be warehouses full of guitars at the end of this year," said Mr. D'Addario. Paul Block is also concerned about sales. His company, Galkin Automated Products Corp. in West Babylon, N.Y., makes machines that produce mattresses. He said some people are still buying, but mostly those who see this as an opportunity to press for better prices. "There are people all over the world who know how to wheel and deal," he said. The upshot is that exports will no longer serve as the counterweight to weakness in the domestic economy. Over the past year, real goods exports surged by $114 billion, or 12%, up across every major category. They now make up nearly 13.5% of gross domestic product, the highest percentage since World War II. "Export-oriented manufacturers are going from being a real source of growth to just barely hanging on," said Mark Zandi, chief economist at Moody's Economy.com, an economic research and consulting firm in West Chester, Pa., adding that each day the credit markets remain in serious distress increases chances that the outlook for exporters will darken even further. Cyril Bath Co. is among those already seeing trouble signs. The Monroe, N.C., maker of aerospace parts and machinery estimates that incoming orders have fallen 25% in the last month. It saw sales nearly double last year to $23 million, for instance, with exports accounting for all the growth. Michael Zimmer, Cyril Bath's CEO, said overseas customers are delaying orders, and he worries that the trend could accelerate if the global turmoil continues unabated.

Absorbent pads are already well-known and widely used within the food industry. They are placed between the product and the tray to absorb exudates in order to optimise packaging conditions. Technical Absorbents Ltd (TAL) has developed a highly innovative and efficient absorbent raw material – OASIS Super Absorbent Fibre (OASIS SAF) – that can be incorporated into the fabrics used for production of food pads. The versatility of SAF allows fabric constructions to be designed, which absorb and lock away excess liquid from the food stuff within its core. This helps keep produce fresher for longer. Its non-migratory properties mean that the fabrics can be cut and shaped as required to suit the type of product and the packaging that is being used. Regulated by the US-Food and Drug Administration (FDA), it can be used as a fluid absorbent in food contact materials in the packaging of fruit, vegetables, poultry, meat and fish at refrigerated and frozen temperatures. Dave Hill, business development manager, TAL, said ''OASIS SAF® provides the ability to produce extremely discreet absorbent food packaging materials that exceed industry requirements. It can be processed through all of the key nonwoven manufacturing technologies.''

With the help of its president and CEO Marco Alvarez, Elgin-based Fabric Images Inc., has expanded beyond America's borders and is seeking global business. Fabric Images, a manufacturer of custom-printed tensioned fabric structures, was founded in 1992 by Pat Hayes who, after 32 years in the music business, saw an opportunity to create banners and graphics for the trade show industry. Alvarez, Hayes' son-in-law, came on board in 1995 and the two were soon branching out into the more developed avenues of textile printing. "We wanted to do something more than just cutting and sewing graphics on fabric," said Hayes. "So we got into this idea of doing dye sublimation printing and textiles." They quickly found that there was a tremendous amount of limitations to the technology. In the mid-1990s, what was then called electrostatic dye sublimation printing was limited to 5-foot-wide printing. Alvarez and Hayes wanted to develop those capabilities to 10-feet-wide and searched for a partner. "Many manufacturers didn't feel that there was a market for it," Alvarez said. He soon found Nur, a company in Israel that was willing to create a printer capable of producing the 10-foot-wide fabrics. "We literally created the market," said Hayes. "Ten-foot-wide dye sublimation printing didn't exist before we pushed Nur." Another hurdle was finding a chemical company that could produce the type of ink they needed. Once they secured an ink partner, Alvarez and Hayes were able to incorporate the proper inks into Nur's printer. "We partnered with them to produce the first 10-foot-wide dye sublimation printer in the world," Alvarez said. Shortly thereafter, in 2001, Fabric Images moved from its original location in Elk Grove Village to Elgin, utilizing a larger building and a burgeoning labor force.

Sept. 11 -- Japanese machinery orders fell for a second month in July, signaling manufacturers expect the global slowdown to crimp demand into next year. Orders, an indicator of capital spending in the next three to six months, declined 3.9 percent from June, when they slid 2.6 percent, the Cabinet Office said today in Tokyo. The median estimate of 35 economists surveyed by Bloomberg News was for a 3.6 percent drop. Japan's economy probably shrank last quarter more than initially estimated as business spending fell, the government is expected to report tomorrow. Slowdowns in the U.S. and Europe have taken a toll on Japanese exports, the engine that drove growth over the past six years, while stagnating wages and the worst inflation in a decade have subdued consumer spending. ``In this environment business investment has got to weaken,'' said Tomoko Fujii, head of Japan economics and strategy at Bank of America Corp. in Tokyo. ``Companies are very cautious in a recessionary environment and I don't think they're bold enough to anticipate a quick profit recovery.'' The yen traded at 107.41 per dollar at 9:08 a.m. in Tokyo from 107.43 before the report was published. Orders received from manufacturers tumbled 10.4 percent, the first decline in four months, the Cabinet Office said. Non- manufacturing orders fell 2.4 percent, the second straight drop. Capital Spending Companies reduced spending on factories and equipment for a fifth quarter in the three months ended June 30, the Finance Ministry said last week. Record costs for oil and raw materials caused profits to decline for the fourth consecutive quarter. The government will use the capital spending figures to revise second-quarter gross domestic product tomorrow. The economy contracted an annualized 3.1 percent, more than the 2.4 percent reported last month, according to economists surveyed. Slower growth in the U.S. has forced exporters including Toyota Motor Corp. to cut production and jobs. A Kyushu-based Toyota subsidiary reduced output of sport-utility vehicles by at least 10 percent and fired 800 workers since June. Tokyo Electron Ltd., Japan's biggest maker of semiconductor equipment, last month lowered its full-year profit forecast by 40 percent after chipmakers postponed spending plans. Chipmaker Elpida Memory Inc. said this week that it will have to cut output for the first time to mop up inventories that accumulated as global demand for personal computers slowed. More Resilient Even so, economists say the current slowdown is unlikely to be as severe as the last recession, which lasted from December 2000 to January 2002. The economy is more resilient because companies have shed the excess workers, factory lines and debt that contributed to a decade of stagnation in the 1990s. ``In the old days external shocks tended to get amplified,'' said Seiji Shiraishi, chief Japan economist at HSBC Securities Ltd. in Tokyo. ``But this time around, without the three excesses, the downside risks are limited.'' The world's second-largest economy may also benefit more than others from declining oil prices, according to Julian Jessop, who says Japan is unique in having escaped the credit crunch and the housing collapse that's hit the U.S. and Europe. Crude has eased 29 percent since reaching a record in July. ``That's going to relieve a lot of cost pressures,'' said Jessop, chief international economist at Capital Economics Ltd. in London. ``I'm convinced the Japanese economy will be one of the first to recover as the global inflation shock fades.'' Other economists say oil's decline reflects weakening demand and slower growth in the emerging markets that have helped Japanese companies weather the U.S. slowdown. In China, which in July passed the U.S. as Japan's biggest export customer, economic expansion has cooled for four quarters. ``You can't rescue the world economy just with lower oil prices,'' said Martin Schulz, senior economist at a research arm of Fujitsu Ltd., Japan's biggest computer services company. ``Asia has to correct quite a bit and that's an important market for Japan.''