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Having a very hard time wrapping my head around machinery prices
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Posted 8/6/2022 07:42 (#9782852 - in reply to #9782811)
Subject: RE: Having a very hard time wrapping my head around machinery prices

I like this last post. I got to support a combine brand for a couple years and I spent a lot of time looking at the cost per acre to maintain and repair the combines. New or used the first several years of ownership seem to be the most expensive. If it's new it's because it depreciation and you get that lecture from the customer on how great of a deal the neighbor got on their brand to roll over versus their machine. If it was used they usually ended up paying for all the lack of Maintenance from the previous owner

I had a few customers that they did 5000 Acres or more some had just one combine and was all corn, corn Bean mix and some guys had two machines. But a lot of them were at that 10 to 12 years old. Their annual bill keep them machines going was literally 1 to 2 cents per bushel over the life of the machine. It was kind of fun to see the guys say well for another 10 grand inspection we can get one more year out of this thing versus the cost that it would take to trade.

We had some calculations to run some different scenarios as far as trading every year trading every third year fifth year or keep in the combine like they did. Keeping the combine like they did for 10 years or more and not having to put that much money into them each year they could literally Park that combine out at the end of the road with a free sign buy another new one and start over and be a lot money ahead versus rolling combines over.

I think the big thing there was any customer that was doing the Maintenance and Service program yearly had the much lower cost the combines lasted a lot longer, had a few guys that would not do the combine inspections on a regular basis. They were that customer that was turn the key everything works let's go until something doesn't work. Them guys had a much higher cost of repairs and switched Brands more often.

It was fun to see that you had many customers with several million bushels and Counting through their machines and you look at their 10-year average repair not a whole lot.

Edited by easymoney 8/6/2022 09:51
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