Is the machinery trade in trouble?

[dave mountain]

It’s not warranty if the machine hasn’t been paid for and is rejected on arrival!

Fair enough, it sounded like the machine had been working before it was sent back

 

[Fendt820]

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 ?

Dealers seem to be completely utter useless. Rang one 10 days ago 3 times and still no response. Just want the work.

 

[betweenthelines]

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.

Sums things up perfectly.

If you think something is too dear, don't buy it.

 

[Sid]

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!

Spend £120 on food basics they government get £0
Spend the spare £120 on gadgets or toys and the government get £20 in VAT

That's one reason food is cheap

 

[Steevo]

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

Won’t need anything like the amount of machinery for that…..

 

[Hilly]

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

Subs moved away from production years ago .

 

[Tarw Coch]

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

Difference between machinery and land is over the long term land goes up in value, machinery depreciates.

 

[icanshootwell]

Looked at a g series valtra the other day, quite basic really, 60 k for it, main duties would be blowing straw In the winter. Told them I would think about it

 

[Two Tone]

I went to a farm the other day to look at a new Combine being demonstrated. It was very nice and as an ex-demo is on offer for about £200k. Being £30k off the new discounted price.
The dealer is offering about £40K for his old one which is 14 years old, in superb condition and has plenty of life left in her, but obviously a little bit slower than the new one.
So £160k to change, financed over 5 years is going to be the best part of £35k per year over the next 5 years.

There’s me thinking WTF for?
How the Feck can that be justified?

Just to be able to have something that does exactly the same thing!
There is no way that keeping the old one will cost anything like that to keep running each year.
It is just Sheer madness.

 

[Sid]

Looked at a g series valtra the other day, quite basic really, 60 k for it, main duties would be blowing straw In the winter. Told them I would think about it

Just need a engine with wheels and a dust mask.
Would be an old 100hp 6 cylinder case or deere in the states

 

[icanshootwell]

Just need a engine with wheels and a dust mask.
Would be an old 100hp 6 cylinder case or deere in the states

My thoughts at the time was this tractor is going to depreciate at an alarming rate, probably half in its value in 3-4 years.

 

[ford 7810]

The dealers don’t seem to be only giving 40-50% of the value at farm sales

 

[thorpe]

DEALERS OVERPAY AT SALES SO THEY CAN CHARGE MORE FOR WHAT THEY HAVE IN THEIR YARD

 

[Dave W]

DEALERS OVERPAY AT SALES SO THEY CAN CHARGE MORE FOR WHAT THEY HAVE IN THEIR YARD

You might have to explain that.
What do they then do with the stuff they've overpaid on?

 

[Aircooled]

You might have to explain that.
What do they then do with the stuff they've overpaid on?

Overcharge!
If he gives top prices for trade ins, he tends to get the trade ins. Two dealers I know of in N Ireland use this method for slurry tankers. Guess what, 2nd hand tankers are silly money.

 

[Dave W]

Overcharge!
If he gives top prices for trade ins, he tends to get the trade ins. Two dealers I know of in N Ireland use this method for slurry tankers. Guess what, 2nd hand tankers are silly money.

How can that be over charging. He's advertising them for a price and people pay it.
You imply that somehow people are being forced to buy these tankers

 

[betweenthelines]

Dealers buy at sales so farmers can't

 

[ColinV6]

I went to a farm the other day to look at a new Combine being demonstrated. It was very nice and as an ex-demo is on offer for about £200k. Being £30k off the new discounted price.
The dealer is offering about £40K for his old one which is 14 years old, in superb condition and has plenty of life left in her, but obviously a little bit slower than the new one.
So £160k to change, financed over 5 years is going to be the best part of £35k per year over the next 5 years.

There’s me thinking WTF for?
How the Feck can that be justified?

Just to be able to have something that does exactly the same thing!
There is no way that keeping the old one will cost anything like that to keep running each year.
It is just Sheer madness.

Maybe the farmer just wants it. Sometimes things don’t have to have rational behind them. Plus after 5 years his new asset will still be worth a lot more than the current ones £40k.

What might appear madness to one man, is another mans pride and enjoyment, even if only in his own head.

 

[dave mountain]

I went to a farm the other day to look at a new Combine being demonstrated. It was very nice and as an ex-demo is on offer for about £200k. Being £30k off the new discounted price.
The dealer is offering about £40K for his old one which is 14 years old, in superb condition and has plenty of life left in her, but obviously a little bit slower than the new one.
So £160k to change, financed over 5 years is going to be the best part of £35k per year over the next 5 years.

There’s me thinking WTF for?
How the Feck can that be justified?

Just to be able to have something that does exactly the same thing!
There is no way that keeping the old one will cost anything like that to keep running each year.
It is just Sheer madness.

I see where your coming from but if it means he saves a fortune on drying and gets more milling premiums etc then 35k probably doesn't look that bad

combining overcapacity is far cheaper than under-capacity

 

[thesilentone]

Maybe the farmer just wants it. Sometimes things don’t have to have rational behind them. Plus after 5 years his new asset will still be worth a lot more than the current ones £40k.

What might appear madness to one man, is another mans pride and enjoyment, even if only in his own head.

If it's a good profitable business, the now fairly good capital allowances will be used very nicely on this level of investment.