Mother Nature can be finicky

[fjlip]

Really wish one of you out there, maybe involved in FLIPPING, could explain to us HOW the F can that keep going? Who is getting the shit end of stick?

[Oliver88]

Really wish one of you out there, maybe involved in FLIPPING, could explain to us HOW the F can that keep going? Who is getting the shit end of stick?

I would like this explained to especially when interest rates are shooting up.

[Guest]

it works until it doesn't
remember the 80's

[Goodtime]

Don't understand it either, have no equity in the machines.

[fjlip]

Yes so WHY would manufacturers cater to monster buyers? How do they square it? Is it all FINANCE profits?

If it all goes to H, rest of us would benefit.

[Guest]

Don't understand it either, have no equity in the machines.

rented land , no equity in equipment ,good for show , i guess
what could possibly go wrong ?

[Freightshaker]

Really wish one of you out there, maybe involved in FLIPPING, could explain to us HOW the F can that keep going? Who is getting the shit end of stick?

If you owned a new combine or tractor outright, what dollar per hour would you trade it every year? Just seeing how close you think these guys trade for.

[Old Cowzilla]

What's the margin on combines 25-30% has to be doesn't it ? Take trades and dump on RB market.

[shtferbrains]

rented land , no equity in equipment ,good for show , i guess
what could possibly go wrong ?

Keep it all up front?

It's all about what you can sleep with.

[furrowtickler]

What's the margin on combines 25-30% has to be doesn't it ? Take trades and dump on RB market.

Has to be at least that
Big multiple deals area all 25-30% cheaper than single unit deals , and they still making money on those multiple deals

[Freightshaker]

Real world example of a piece of ag machinery from few years ago.

Cost to build - $170,000
MSRP - $500,000
Dealer Cost - $385,000
Dealer cost with Multi’s and other programs - $285,000
Farmer pays - ??

Although this isn’t mother deere or case, they would have similar numbers as its pretty standard in the industry, couple percent here or there on programs and multi’s.

[poorboy]

The multi deals are a really good deal for the large operators.

Big manufacturers drop price 20-30% in order to get the deal.

Farmers get back what they paid for the equipment and only have to ante up the higher cost for the new ones.

So the real operating cost is just interest on your money and diesel. Most parts will be under warranty and no oils will need changing in 1 season. Dealer shows up for all repairs, so it frees up on farm labor.

At the end of say 15 years you have machines with high resale value and yearly efficiency gains.

Not everyone is financing the whole deal as most BTO have been flipping equipment for years.

The second buyer of these yearly flips actually pays more to buy than the first multi unit buyer pays. Dealerships make their money off the second buyers.

[fjlip]

Aw that's so nice, SCREW the smaller guys, BIG is all the world needs. Buying IRON paying more for 50+ years now you tell me!

So, this all only works with BRAND new? But one NEVER has to pay in full? Just OWE diff on new?

Can we FLIP one combine or is that small potatoes go away type of thing?

If these guys keep changing colors, next time Manufacturer should say not again, GFY!

[jazz]

Take a good look at those combines. If those have 50 hrs on them I will eat my hat. Looks like they never even saw a header.

So farmers are supposedly managing this business down to the penny, rent, fertilizer, chem marketing etc and then go and eat a couple hundred K in depreciation every few yrs.

In front of my local dealership are new 12 claas combines. Its a JD dealership. In all my years of dealing with them, I have never known them to sell anything but JD. Somehow they talked someone into siome X9s and took their other stuff on flip.

This is probably about market share with the stealerships. Eat some lease losses to get more of your color our there and use these farm influencers for free marketing. Except some guys are turning colors every couple years. Claas and Fendt are the biggest patsies on the prairies.

[LEP]

The multi deals are a really good deal for the large operators.

Big manufacturers drop price 20-30% in order to get the deal.

Farmers get back what they paid for the equipment and only have to ante up the higher cost for the new ones.

So the real operating cost is just interest on your money and diesel. Most parts will be under warranty and no oils will need changing in 1 season. Dealer shows up for all repairs, so it frees up on farm labor.

At the end of say 15 years you have machines with high resale value and yearly efficiency gains.

Not everyone is financing the whole deal as most BTO have been flipping equipment for years.

The second buyer of these yearly flips actually pays more to buy than the first multi unit buyer pays. Dealerships make their money off the second buyers.

Not sure on all the details, but I do know the local bto pays to fix extraordinary damage or wear. So he runs all his combines through his shop. Repairing or replacing concaves etc as needed. For the most part it is fixing rock damage, or accidental damage. Changes oils and filters at the end of season. I know they used to buy a case of spray paint for 24 combines.

I also know that he gets told some of the options or features he has to order. He was told he had to buy 7 sprayers because he was putting too many hours on 5. Has to buy a few wheeled tractors instead of all tracks. Etc.

My guess is he makes one years payments on the new balance every year. He knows what his per acre cost is going into seeding.

He said the most expensive equipment are his drills. 11 every 3 years.