Question: Is a combine cheaper in 2017 than in 1981?

[Crestliner]

We all complain very loudly about the cost of equipment and how hard it is to buy and pay for today. Came across a old 1981 Pami Report. Largest IHC combine made 1480 Axial Flow cash cost:$110,000. In 2017 largest CASEIH combine made 9240 Axial Flow cash cost:$575,000. Based on inflation, respective yields, price of grain and combine capacity, is a combine cheaper or more expensive today in real dollars and purchasing power? I am interested to see your math and your comments?

[tweety]

Fun!!!

inflation - [URL="https://www.bankofcanada.ca/rates/related/inflation-calculator/"]https://www.bankofcanada.ca/rates/related/inflation-calculator/[/URL]

$281,230.47 in 2017 dollars.

i'll leave the capacity to the gear heads but i'm pretty sure its at least twice as fast

[Guest]

i would be surprised if 3 1480's would keep up to a 9240. you are right $110000 was a lot of dough then

[ajl]

I doubt the brand new 9240 would do twice as much as a brand new 1480 would. After all the rotor is the same size. One question is what kind of headers are in the price. D****r headers make all combines more productive than the auger header typical of 81. Grain carts make older combines more productive as well. Larger hopper sizes do increase practical capacity of a combine as well as larger fields do. Often capacity comparisons are done on a new machine vs a worn older machine. As interest rates rise, it will become apparent that the farm machinery industry is not producing machines for the real industry like in the 80's when large machinery depreciated very fast.

[food4u]

Do not forget that at that time you were able to claim a business investment tax credit on new machinery purchases, on top of full depreciation for the first year.

[Guest]

I doubt the brand new 9240 would do twice as much as a brand new 1480 would. After all the rotor is the same size. One question is what kind of headers are in the price. D****r headers make all combines more productive than the auger header typical of 81. Grain carts make older combines more productive as well. Larger hopper sizes do increase practical capacity of a combine as well as larger fields do. Often capacity comparisons are done on a new machine vs a worn older machine. As interest rates rise, it will become apparent that the farm machinery industry is not producing machines for the real industry like in the 80's when large machinery depreciated very fast.

rotor has nothing to do with it here where we grow to much straw , hp of a1480 was 192hp, 9240 is 550 hp . on a rotary combine its all about hp

[Crestliner]

Do not forget that at that time you were able to claim a business investment tax credit on new machinery purchases, on top of full depreciation for the first year.

Yes the ITC of 10% plus 50% depreciation first year was a nice tax deduction back then....but geez I remember we were barely making any money plus the interest at 16% too. It’s way easier to make it work today. The under 50 crowd has no idea how brutal the 1980,s were to survive. I hope they don’t have to see it or us who did get the repeat again.

[fjlip]

Dad bought a NEW 7720 for $105,000 in 1982. 400 bu/hr in 25' 40 bu. wheat. About 4 gal/ hr.
Ran it 10 years, only rub bars and feeder chain, cheap harvests. Ran with a 1680 and capacity over the whole day was close except in barley, 1680 ran away.

9870 does DOUBLE that in 60 bu wheat, 35'. 12-14 gal/hr, speed costs nearly double per bu.

Rotary takes power, but ZERO cracking of grain, pays for cost IMHO.

[bucket]

What was the price of grain on 1981....I think some are forgetting some of the important pieces of the equation.....

5 dollar wheat then would be 15 today....

Yield doesn't factor in because if the manufacturers make to many. (yield for deere and case collectively) they don't drop the price.

The work got done in 1981 but had more neighbors.....


Some things are priceless....

[Sheepwheat]

And fuel was? Fertilizer costs? No comparison at all. Many farmers who did not borrow, made more in interest than they did off the farm. Remember, those were the years when a quarter could pay its way very quickly, often within the first year. And they were good, dry years. At least here they were. The eighties were as difficult as you made them on yourself...

[Sheepwheat]

Here at least, the 70’s and 80’s were indeed the golden years of grain farming. I have my dads income tax returns from those years. It is eye opening. Under 40 bucks an acre total costs, which includes animal costs as well. 40 bushel canola, and wheat, canola sold some years for up to 13 bucks a bushel, often 7 to 9...

Needed probably 12 or 15 grand to live on. The rest went in the bank and collected 14 and 15 per cent interest.

Now, if you were too dry, too leveraged, it was a different thing, like it is now...

[Partners]

Back in the 80's. A combine was worth the same as a quarter of land..approx..100 to 130 thousand..
So now land is way to cheap..

[blackpowder]

Top quarters here now $800k.
Back then guys retired and bought a house in town with $ from 1 quarter. Be a nice shack here now days even at $600k.
Another. Are the two combine scenarios comparable if bought used at half price??
I once bought a 14 yr old 1680 for $50k. Wouldnt touch a 14 yr old 9240 for $300k. Only time will tell

[burnt]

Yes the ITC of 10% plus 50% depreciation first year was a nice tax deduction back then....but geez I remember we were barely making any money plus the interest at 16% too. It’s way easier to make it work today. The under 50 crowd has no idea how brutal the 1980,s were to survive. I hope they don’t have to see it or us who did get the repeat again.

What interest rate would it take today - 8%? That's what it was for my earliest loans. But not for long...BOOM!

I wonder if 8% would be just as disastrous today as 22% was back in '81.

I've used the measuring stick of a year's wage's buying power back then compared to a year's wages buying power today.

I also think it was easier back then. In fact, I know it was.

[Hamloc]

What was the price of grain on 1981....I think some are forgetting some of the important pieces of the equation.....

5 dollar wheat then would be 15 today....

Yield doesn't factor in because if the manufacturers make to many. (yield for deere and case collectively) they don't drop the price.

The work got done in 1981 but had more neighbors.....


Some things are priceless....

Wheat is still 5 dollars today, that would be $1.95 in 1981 dollars. A $550000 combine is $214500 in 1981 dollars. So if it was hard to pay for a $110000 dollar combine in 1981 with $5 wheat, how hard would it be to pay for a $214500 combine in 1981 with $1.95 wheat, which is what you would be doing using today's values in 1981 dollars. No contest in my mind, combines were more affordable in 1981.