Is the machinery trade in trouble?

D14

Member
No specific manufacturer but just generally is the trade in trouble? New machinery prices are unviable unless you are farming thousands of acres running a minimal line up of equipment that you run hard. I've had a few items I wanted to move on and the trade offered 40-50% under the true values. I have since sold privately at the proper values but if they need to build that kind of margin in whats going on behind the scenes? You then also get the dealers that never reply to emails or phone calls and they don't seem to cold call any more looking for business. Our industry is shrinking yet dealers don't seem hungry for business.
Whats going on ?
 

dave mountain

Member
Livestock Farmer
i would think 40-50% isnt far off for lower value equipment as the dealer needs to transport it, inspect it and usually give some form of warranty, and then make some sort of profit. Tbh i dont think a lack of cold calling is a bad thing at all, though agreed it would be annoying if dealers dont reply. Tbh ive never had problems with dealers not replying, but i often have problems with the prices they reply with 😂
 

Robt

Member
Location
Suffolk
As Dave W says. Trade is very good . Most new suppliers are 20-30% up on sales. (turn over is up, but profit is down) Used prices are good due to long lead times on new machines. If you buy right you sell right, its easy to buy wrong then sit on stock to long. Most if not all dealers will have specif kpi's they use to monitor their business performance. ROI (return on investment) RGP (retained gross profit) RNP ( retained net profit) and days in stock.
Some dealers are very good at new sales, some are very good at used sales. The ones that are good at both have the cash. I know thats teaching you all to suck eggs but that how it is.
 

balerman

Member
Location
N Devon
Don’t normally get or expect warranty on second hand goods here.I’m also wary of the term ‘will go through the workshop’ cos sometimes it means just that,not stopping on there at all.I know of 2 machines bought lately just shy of £10k each that were sold as being ready to go to work.Both have gone straight back for the work to be done again,one with a collapsed bearing on it,and the other a plough wheel falling off when it was turned over.All put right in the end but totally un necessary ,and from franchise dealers as well.
 

Hilly

Member
Don’t normally get or expect warranty on second hand goods here.I’m also wary of the term ‘will go through the workshop’ cos sometimes it means just that,not stopping on there at all.I know of 2 machines bought lately just shy of £10k each that were sold as being ready to go to work.Both have gone straight back for the work to be done again,one with a collapsed bearing on it,and the other a plough wheel falling off when it was turned over.All put right in the end but totally un necessary ,and from franchise dealers as well.
Main dealers saying it’s “ been thorough our workshop “ ha what a joke that line is !!
 
No specific manufacturer but just generally is the trade in trouble? New machinery prices are unviable unless you are farming thousands of acres running a minimal line up of equipment that you run hard. I've had a few items I wanted to move on and the trade offered 40-50% under the true values. I have since sold privately at the proper values but if they need to build that kind of margin in whats going on behind the scenes? You then also get the dealers that never reply to emails or phone calls and they don't seem to cold call any more looking for business. Our industry is shrinking yet dealers don't seem hungry for business.
Whats going on ?
[/Q
No specific manufacturer but just generally is the trade in trouble? New machinery prices are unviable unless you are farming thousands of acres running a minimal line up of equipment that you run hard. I've had a few items I wanted to move on and the trade offered 40-50% under the true values. I have since sold privately at the proper values but if they need to build that kind of margin in whats going on behind the scenes? You then also get the dealers that never reply to emails or phone calls and they don't seem to cold call any more looking for business. Our industry is shrinking yet dealers don't seem hungry for business.
Whats going on ?

In the last qtr John Deere's revenue was up 29%...........net income up 105% and net profit margin up 59%.
I see a lot of new JD equipment around, farm and construction, backhoes/trackhoes etc. there is so much money sloshing thru the system from the gov programs they will have a stellar year.
 

dave mountain

Member
Livestock Farmer
Don’t normally get or expect warranty on second hand goods here.I’m also wary of the term ‘will go through the workshop’ cos sometimes it means just that,not stopping on there at all.I know of 2 machines bought lately just shy of £10k each that were sold as being ready to go to work.Both have gone straight back for the work to be done again,one with a collapsed bearing on it,and the other a plough wheel falling off when it was turned over.All put right in the end but totally un necessary ,and from franchise dealers as well.
I know what you mean, but the fact that the machines went back to have work done means that there was some form of warranty, and at the dealers expense, hence the big mark-ups
 

Martin Holden

Member
Trade
Location
Cheltenham
The bigger issue here isn’t the price of new machinery. All goods have gone up massively in the last 18 months right across many industries. The issue with Ag is that the price for what is produced in the field hasn’t kept up with most if not all other outputs. Food is too cheap. Big words and bold statement but it’s true. The public have been conditioned into cheap food by the retailers yet spend millions on the latest phones and gadgets so the money is there for improved prices but how the change takes place is the challenge. How do you convince folk to not chase the latest mobile TV etc and value food a bit more. Perhaps a food shortage would bring the matter to the forefront? I know - stupid suggestion!
 

Hilly

Member
The bigger issue here isn’t the price of new machinery. All goods have gone up massively in the last 18 months right across many industries. The issue with Ag is that the price for what is produced in the field hasn’t kept up with most if not all other outputs. Food is too cheap. Big words and bold statement but it’s true. The public have been conditioned into cheap food by the retailers yet spend millions on the latest phones and gadgets so the money is there for improved prices but how the change takes place is the challenge. How do you convince folk to not chase the latest mobile TV etc and value food a bit more. Perhaps a food shortage would bring the matter to the forefront? I know - stupid suggestion!
Exactly, 100% agree with this ^post of the month 😂
 

dave mountain

Member
Livestock Farmer
The bigger issue here isn’t the price of new machinery. All goods have gone up massively in the last 18 months right across many industries. The issue with Ag is that the price for what is produced in the field hasn’t kept up with most if not all other outputs. Food is too cheap. Big words and bold statement but it’s true. The public have been conditioned into cheap food by the retailers yet spend millions on the latest phones and gadgets so the money is there for improved prices but how the change takes place is the challenge. How do you convince folk to not chase the latest mobile TV etc and value food a bit more. Perhaps a food shortage would bring the matter to the forefront? I know - stupid suggestion!
One of the Brexit promises was reducing cost of living for the poorest in the UK by imports (possibly tarriff free) of cheaper food, clothing and footwear from outside the EU.

From a beef and lamb point of view i actually think the UK is in a good position as global red meat consumption (and hopefully prices) continues to increase, and there is a big opportunity from marketing british beef and lamb as a premium product (which it is) in far eastern countries amongst others.

Having said that, global food prices (including beef and lamb) are never going to keep up with other outputs, and whether we like it or not, I think realistically we are going to head toward getting more environmental payments and producing less food as the government moves forward with making trading arrangements with the rest of the world.

This is just my 2 pence and could turn out to be completely wrong, particularly as it partially relies on the government keeping one of its brexit promises.
 
Business is booming for them and long may it continue,
We rely on machinery dealers for our business and would be completely lost without them and their support. After venturing over to the dark side of private selling recently and quickly remembering why I gave it up for a bad job last time around.

I recently had a chap call in to the yard unannounced to look at a piece of machinery of mine.. he was sent by the dealer who I hadn't spoke to in probably 5/6 months and defiantly hadn't discussed with him changing this piece of machinery.... Long story short.. I traded... A great sales tactic from the dealer, just sell your customers machinery without their knowledge and assume they will buy the new one :ROFLMAO: Must be to loyal
 

thesilentone

Member
Livestock Farmer
Location
Cumbria
Speculate and politicise all you like. Machinery, like any other market is driven by supply and demand. If everyone stops buying because they can't afford it, the price will go down.

You will know when the machinery industry is struggling, the long-term 0% deals will start popping up.

But at the moment is isn't, and they aren't so machinery can't be over-priced, yet.

My guess is, most farmers could get by if they didn't buy anything new for the next 3-5 years.
 

thesilentone

Member
Livestock Farmer
Location
Cumbria
Business is booming for them and long may it continue,
We rely on machinery dealers for our business and would be completely lost without them and their support. After venturing over to the dark side of private selling recently and quickly remembering why I gave it up for a bad job last time around.

I recently had a chap call in to the yard unannounced to look at a piece of machinery of mine.. he was sent by the dealer who I hadn't spoke to in probably 5/6 months and defiantly hadn't discussed with him changing this piece of machinery.... Long story short.. I traded... A great sales tactic from the dealer, just sell your customers machinery without their knowledge and assume they will buy the new one :ROFLMAO: Must be to loyal

Back in the 50's and 60's that's how MF taught their salesmen.

"Don't go out to sell, go out to buy"

The new sale will follow.

How many MF users have heard the words "I've got a buyer for your tractor"
 

Dave W

Member
Location
chesterfield
Speculate and politicise all you like. Machinery, like any other market is driven by supply and demand. If everyone stops buying because they can't afford it, the price will go down.

summed up in one sentence.
Same goes for all this apparently over priced land.
If it was genuinely too expensive then folk wouldn't buy
 

Martin Holden

Member
Trade
Location
Cheltenham
One of the Brexit promises was reducing cost of living for the poorest in the UK by imports (possibly tarriff free) of cheaper food, clothing and footwear from outside the EU.

From a beef and lamb point of view i actually think the UK is in a good position as global red meat consumption (and hopefully prices) continues to increase, and there is a big opportunity from marketing british beef and lamb as a premium product (which it is) in far eastern countries amongst others.

Having said that, global food prices (including beef and lamb) are never going to keep up with other outputs, and whether we like it or not, I think realistically we are going to head toward getting more environmental payments and producing less food as the government moves forward with making trading arrangements with the rest of the world.

This is just my 2 pence and could turn out to be completely wrong, particularly as it partially relies on the government keeping one of its brexit promises.
Indeed. Political travel will see subsidies move away from ultimate production to caring for environment not that farmers don’t already but you know what I mean. Politics can and often get things wrong so let’s see what happens in the next 3/5!years
 

SFI - What % were you taking out of production?

  • 0 %

    Votes: 79 42.9%
  • Up to 25%

    Votes: 63 34.2%
  • 25-50%

    Votes: 30 16.3%
  • 50-75%

    Votes: 3 1.6%
  • 75-100%

    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 6 3.3%

Red Tractor drops launch of green farming scheme amid anger from farmers

  • 1,287
  • 1
As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
Top