Scrapping A380 jetliners

[ajl]

A German leasing company who happens to own the first two A380 jetliners has decided to part them out as there is no resale value for them. Same fate awaits some of this ridiculous million dollar farm machinery now that the era of zero percent interest is gone. Thinking of 100' Seedhawks and Bourgault drills in particular. B of C will raise in July, not because they want to but because they have to in order to head off stagflation. An enormous amount of structural inefficiency has been baked into the farm cake due to subsidized interest and getting it out will not be pretty.

[farmaholic]

I'm thinking my 60 ft Bourgault 3320 Ghetto seeder will retain it's value, I will get my monies worth from this drill and smaller drill users will want to grow into it. Well maintained but they are high maintenance!

So you're calling for an iron(equipment) correction ? Easy for them....they just won't build them until they receive a build order with a down payment. They're not farmers!

[AlbertaFarmer5]

We all have different perspectives on these things depending on which end of the market we are on I suppose.
One of my biggest concerns is that the nearly free used equipment will eventually come to an end.

Being able to buy large late-model(by my standards) equipment that has been almost completely depreciated by somebody else , Has made medium scale grain farming quite profitable for me.

If The used equipment market turns out to be cyclical , This glut eventually passes , It will make a big difference to the bottom line.

For example, I have a total of $4000 purchase price for a 120 foot sprayer With all the bells and whistles, plus the tractor to pull it. I could replace it every year for less than a dollar an acre sprayed.

[fjlip]

You got it AB5, my calculations also. Low investment =near zero overhead costs. My 5710 cost us $45,000 ten years ago, even if worth zero, very low cost to seed. Crops just as good OR better than 100 times value units. And near ZERO repairs, one broken shank on warranty, hoses last 10 years due to near zero flexing, built like a tank, just drive it. Think about that big spenders when wrenching, welding, paying for expensive parts. Complicated/ sensor/harness issues will discount monster drills.

[farmaholic]

You got it AB5, my calculations also. Low investment =near zero overhead costs. My 5710 cost us $45,000 ten years ago, even if worth zero, very low cost to seed. Crops just as good OR better than 100 times value units. And near ZERO repairs, built like a tank, just drive it. Think about that big spenders.

I started out farming that way, if no one takes over for sure....i will probably quit that way too. Think about it.

[MBgrower]

$400K plus for a new SP sprayer. if you do the math, it makes sense to hire custom applicators, no repairs, no depreciation, no exposure, and no liability for spray drifting the neighbors. Yah, sometimes they do get to your field a day or too late, but want really is that loss?

[fjlip]

$400K plus for a new SP sprayer. if you do the math, it makes sense to hire custom applicators, no repairs, no depreciation, no exposure, and no liability for spray drifting the neighbors. Yah, sometimes they do get to your field a day or too late, but want really is that loss?

Weighed that option too, regular long term customers have it made, first on the list. Too few custom guys here, big operations are TOO busy with their own. So my 2009 Case-IH, 130', 1300 imp gal tank for $24k, needs 4 good days to do our farm. Timely, cheap even if worth ZERO after this year. Usually wind and weather turn that into 2 weeks but so what. SFA to do fall R'up.

[helmsdale]

Pull a system 62 flexi with a jd 2wd pushing 10,000 hrs. I could buy this setup every pass for less than a yearly lease payment on a new one.

I could let the booms freeze rock solid this winter and pick up another just like it for less than the cost of sprayer winterizer...

[farmaholic]

A couple of years ago a neighbor stopped by and we were chatting about our futures and I said if no one takes over I will farm afew more years and use up some of the heavy front end depreciation on the new equipment then bow out while it still has some good value, before its wore out or I feel the need to replace it. He got a blank look on his face.

No one really takes one huge step from the kind of stuff I started with to new, at least I never did, I slowly upgraded over decades.

I am not a frequent equipment flipper. I try to buy something good and use it for quite awhile.

Everyone looks at it from a different angle depending on finances and where they are in their career.

I can respect what ever choices people make that suits them and their situation....

To each their own

Take care and work safe.

[fjlip]

You are right farmaholic, in my 50 years, Dad bought new stuff in 70's and 80's but after the 90's we used iron a long time. 8760 here for 16 years, 4250 here for 25 years, 9600 for 12 years, Swather for 14 years, BG sprayer 22 years. Just mind boggling to see all the nearly new stuff in Ritchie's auctions. But as you say, if not your money who cares, do what satisfies you, be happy, LIFE IS SHORT!