Leroy, SK Ritchie Auction...

[Burbert]

Herr Harper is gonna build a bunch more
prisons and throw away the keys. Next
comes some really efficient ovens wit big
smoke stacks to deal wit politico foe.
Law and order its the only way ta go,
roundem up and shippem out, the final
solution to Comedian opposition!
Chancellor forever, and ever.

[hobbyfrmr]

FarmRanger, is it fair to compare that $1500/year
savings against the cost of the equivalent volume
grain bags a farm would use instead of the bins? I
know that there are advantages, efficiencies to
bagging, but not all farms require this . Is this still
an accurate line of thought (apples to apples)?

[mbratrud]

Couple things to contribute from our experience. Lease through your own bank and can get leasing rates for much cheaper. For example just did liquid storage bin for 5%. Secondly recaptured depreciation is your worst consequence down the road. A good balance of leasing and purchasing is good but you have to be careful that on Auction sale day you don't get a big tax surprise. Good discussion.

[FarmRanger]

hobbyfrmr, it's important to make all financial decisions you look at into ones that are"apples to apples". I use Net Present Value analysis, which brings all future anticipate cash flows back to what they are "worth" today.

If you look at a grain bagger, the first thing you want to do is compare the cost to owning bins. Except for the cost of the bagger and extractor, all your costs for this option are in the future. With bins, most of your costs are up-front. To properly compare the two, NPV analysis is the best way to get all those cash flows back to "apples to apples" equivalent values.

Very often there are other non-monetary preferences that ultimately affect your final decision. One is slightly more expensive, but sometimes you love/hate permanent bins, plowing snow out in your field/dealing with plastic/ shoveling bins/ expandable storage/decreased trucking, etc. The extra / reduced cost of bins versus bags is offset by other non-monetary factors. I like working the numbers out to the point that I know that the present value cost of one decision is $X more expensive than the other. That way I can decide that I am willing to pay that extra money for the one I prefer, or pat myself on the back for deducing and making the lowest cost decision.

For me, I almost have enough bins now, my bins are all close to my fields, and I have a good bin unloading system, so the financial advantages of a bagger would have to be large for me.

If you know the costs of the two options you're looking at, I can walk you through the numbers, but we should probably start a new thread in Machinery & equipment, or Farm Management.

[hobbyfrmr]

FarmRanger, I do not know up to date costs, I am not interested in bins at this time. I agree, this thread went on a tangent. A repost would be helpful because this is valuable information. I will try to do it!