Iron addiction

[grassfarmer]

Looking at the latest Ritchie auction catalog it seems many have an expensive addiction to gleaming, shiny new iron. We used to reckon in Europe that unless you were putting 1000 hours a year on a tractor you couldn't justify owning newer machinery.
Can't believe how many of the loader tractors are only showing 200 hours a year on them. I realize your 4wds get used less here with the shorter seasons and mainly used for seeding/tillage but most of these for sale only have around 200 hrs a year on them.

Can it really be justified paying hundreds of thousands of dollars and using them so little?

[freewheat]

Grass. I agree.

[BreadWinner]

I would say it is justified because we live in a place that has to have reliable equipment do allot of work in a short period of time. Where would a farmer get his not as shiny equiment from if nobody ever new iron? Or is this another big new farm bashing thread?

[freewheat]

Breadwinner, I agree we have a limited time to get stuff done, and it is very good someone is out buying my future machinery! lol.

For my part, I am not bashing, I just don't see the dollars and cents of a half million dollar combine. For most at least. But in 10 years, when it is 80 000, I'm good with it!

[bucket]

I am ok with used equipment but like my father in law used to say - you can't have quality used equipment without someone buying new.

He also used to say - there are guys that drive deere and those that wish they could. Lol.

[freewheat]

lol, bucket. Our area is like that about green iron.

[grassfarmer]

Not bashing anyone - just an observation. If these tractors are representative of agriculture as a whole and they had twice the hours on them - say 400 hours/year wouldn't that half the new tractor spending of the industry as a whole? Surely the money saved would more than cover increased repair budgets and result in a net win for farmers/ranchers?

[Horse]

Yea BUT if we can get cheap rent we can have that new paint smell IMHO

[BreadWinner]

Equipment costs on my farm are figured out per acre, new combines figure in at around $20-30/acre if kept 3 years. One or two year old combines figure in at $13-15/acre. combines with 1500 plus hrs don't work into the formula due to uncertain breakdowns and down time. If you have smaller acres and more time these are just fine. Interest and repairs are figured into my combine budget. Any good opperation should know its cost to do business.

[grassfarmer]

Breadwinner at how many hours do you consider the tractors to be a poor risk due to uncertain breakdowns? Is this what it really comes down to - despite the huge $ prices they are basically disposable short term tools because they are either unreliable or cost too much to repair?
Is this a real physical issue with the tractors or is it more a business decision based on having repairs fixed under warranty versus out of your pocket?

[freewheat]

My combine cost me less than 20 bucks an acre to BUY. And it cost me 0 dollars an acre in parts this year.

It all depends on how you up keep them too. My tractor has cost me about 50 cents an acre a year in parts...

[BreadWinner]

Grassfarmer most of our 4wd tractors we have bought new with 0% finance option, so no repair bill and low interest help lower per acre cost. Tractors don't seem to depreciate as much as some equipment. Air drills are terrible and have high maintenance costs. If we buy a new tractor for $250,000.00 and use it for 4 years at 250hrs per year and then sell it for $180,000.00, it has basically cost us $70,000.00 for 4 years of use. Seems like allot, our farm seeds 7000 acres and it works out to a cost of $2.50/ac. No big repairs needed and low interest help as well being able to write off the depreciation for income tax deduction.
Cost of New tractors and US dollar are huge factors going forward and it may not always pencil out as good.

[BreadWinner]

Tractors are getting less reliable and more costly to fix because of Emissions and electronic crap,post 2010. I feel for anyone buying these machines without warranty because these are super costly to repair and it can only be done by the dealership. There will be allot of lemons out there so be careful what you buy. We have only bought used FWA tractors due to lack of use on our farm.

[bucket]

Emissions. That's a real snake oil.

Tractors today put on one third the hours so using them less solved the emissions issues faster and more cost effective than tier 4 standards.

I wish people that think this shit up would think where the greatest savings actually came from. It came from one pass seeding not tier 4 engines.

[Richard5]

Gotta love this comment ... "No big repairs needed and low interest help as well being able to write off the depreciation for income tax deduction"

I can agree with low repairs but you have paid for that up front with the cost of the tractor

There is no such thing as 0% interest. The companies build that incentive into the price of the unit.

Tax deductions? Most large farms are incorporated so are you telling me you want to spend $100,000 to save a whopping $13,000? Its a very small incentive if the 1000 hour tractor would still do the same task for another 10 years