A question about the cost of machinery...

[Borlace1]

Hi guys

This is my first post and, as well as introducing myself, I thought I'd get a gauge on your thoughts on a couple of topics.

I'm the agriculutral finance specialist at Midlands Asset Finance (you might have seen our ads popping up on the Forum).

I've noticed that a lot of people I speak to suffer from wastage issues, many of which are using old machinery that have high labour costs.

Do any of you have processes in place for replacing old machinery or is it a case of doing it as and when?

And do you find that precision farming is a good way of reducing wastage?

Appreciate your feedback!

 

[Drillman]

I’m afraid to say that even with the most super duper finance package available, stuff still has to be paid for, and for many farms a lot of kit is getting unaffordable. So in many cases old kit and a make do and mend mindset has to suffice.

I personally can see a future where the financing of a refurbishment rather than replacement will become common place!

 

[Still Farming]

Welcome.
Change as and when needed subject to income etc.
I guess all running new change every 3 years or when renew finance agreements or when warranties run out.
Older kit looked" after in house" ,maybe
You ither pay the finance person or fitter person .

 

[Werzle]

From a livestock farmers point of view the difference between livestock prices over the last 20 years and machinery prices over the same period make older kit that is easier and cheaper to maintain/fix look more attractive.

 

[Borlace1]

Welcome.
Change as and when needed subject to income etc.
I guess all running new change every 3 years or when renew finance agreements or when warranties run out.
Older kit looked" after in house" ,maybe
You ither pay the finance person or fitter person .

I’m afraid to say that even with the most super duper finance package available, stuff still has to be paid for, and for many farms a lot of kit is getting unaffordable. So in many cases old kit and a make do and mend mindset has to suffice.

I personally can see a future where the financing of a refurbishment rather than replacement will become common place!

I guess with the uncertainty of returns and the reducing of the annual BPS, where people often saved this for their machinery purposes it can be seen to be more difficult.

Is diversification the key then, but I guess, diversify into what? I do know that Hire Purchase payments can be adjusted so it can tie in with your business seasonally rather than always making monthly payments so there are other options!

 

[Borlace1]

From a livestock farmers point of view the difference between livestock prices over the last 20 years and machinery prices over the same period make older kit that is easier and cheaper to maintain/fix look more attractive.

In terms of machinery for livestock farmers, at what point then does something need replacing? Is it when the kit just can’t be relied upon anymore, or when it has done a certain amount of hours, or neither?

 

[pine_guy]

You ither pay the finance person or fitter person .

Or in the case of some new kit, both, if something fails not covered by Warrenty and the manufacturer won’t stand it.

The depreciation on some new gear the price it is now is nearly more than I paid for some of mine In the first place. And new can be just as unreliable as old if you are unlucky.

 

[Ormond]

Quite often on a livestock farm there are things need replacing but have to make do/ repair until you feel in a position financial you can replace it comfortable. We as a livestock farm will replace /renew when can especially if it's going to save time/ money in the long term. Our approach is changing in the uncertain climate...i prefer the idea of saving up for something rather than changing something and hoping we'll be able to pay for it in the next 4 years. We're becoming more careful in finance items as the cost of the product has increased to massive amount of money.

 

[pine_guy]

In terms of machinery for livestock farmers, at what point then does something need replacing? Is it when the kit just can’t be relied upon anymore, or when it has done a certain amount of hours, or neither?

All are different, but for me, when the maintenance looks to outstrip the cost of replacing. But often for me, I will buy if I see a secondhand machine that I think is sound. I generally can’t justify new.

 

[Still Farming]

In terms of machinery for livestock farmers, at what point then does something need replacing? Is it when the kit just can’t be relied upon anymore, or when it has done a certain amount of hours, or neither?

When knackered and then re resurrected in welders unit ?

 

[Werzle]

In terms of machinery for livestock farmers, at what point then does something need replacing? Is it when the kit just can’t be relied upon anymore, or when it has done a certain amount of hours, or neither?

Yes when its worn out and perhaps if we have a rare great year for livestock prices.

 

[Scribus]

I guess with the uncertainty of returns and the reducing of the annual BPS, where people often saved this for their machinery purposes it can be seen to be more difficult.

Is diversification the key then, but I guess, diversify into what? I do know that Hire Purchase payments can be adjusted so it can tie in with your business seasonally rather than always making monthly payments so there are other options!

Diversification as the answer to everything has been a buzzword in the agricultural scene for decades. It never really happens because farmers tend to be interested in farming, and improving/renewing their skills at same, while it also dilutes the money available for investment in existing enterprises.

 

[Mursal]

Welcome to the forum .................

At what point do we change kit? That depends on the cost of repair, how time critical the work is and the cost of replacement. If you can control even one of these, for example repair in house, then it leaves changing kit a lot more flexible. We certainly wouldn't be an establishment to go by, it just works for us. Our accountant was quite astonished when he tried doing our tax returns, so he packed it in as a bad job, we just do a self assessment now, saves explaining.

I'm not sure what you mean by the term "wastage" ?

 

[Bury the Trash]

Diversification as the answer to everything has been a buzzword in the agricultural scene for decades. It never really happens because farmers tend to be interested in farming, and improving/renewing their skills at same, while it also dilutes the money available for investment in existing enterprises.

On the contrary, diversification has been a good answer for some, it depends what skills the farm business has for other things along with an open minded enough approach to look for / take outside work / opportunities.

 

[james ds]

The problem I have with finance companies is they want to finance new kit rather than older kit, I know where a finance company refused to finance a 10 year old machine but instead offered three times the money to finance a new machine , now the farmer knew what he could afford to pay every month but the company would not listen to him , they would have preferred to give him the money for the new machine and put him in financial trouble and if it had to be repossed it would be a good fresh machine to sell on.

 

[Scribus]

On the contrary, diversification has been a good answer for some, it depends what skills the farm business has for other things along with an open minded enough approach to look for / take outside work / opportunities.

For some yes, but not for all, which is why I said 'it never really happens', rather than it doesn't at all.

 

[michael N123]

Normally when something’s completly fecked we change it

Apart from my tractor I get a new one every 5 year on a 5 year warranty

 

[michael N123]

The problem I have with finance companies is they want to finance new kit rather than older kit, I know where a finance company refused to finance a 10 year old machine but instead offered three times the money to finance a new machine , now the farmer knew what he could afford to pay every month but the company would not listen to him , they would have preferred to give him the money for the new machine and put him in financial trouble and if it had to be repossed it would be a good fresh machine to sell on.

Money supermarket and borrow the money to buy a car

 

[Mursal]

Credit union, house extension?

 

[Scribus]

Marry an elderly widow and keep the stairs of her mansion polished.