Machinery price discussion .

[PI Stsker]

Some have while things were constantly going up, for example there will have been plenty of ex hire trailers sold for more than they cost new.

It won't work like that for ever though

I’d imagine it will probably stay the same, when you go and buy 30/40/50 silage trailers per year you can negotiate quite a good price to buy them for, run them for 12months then sell on for the same money you brought for if not more, this makes the cost of ownership either nil or positive figures added with a hire charge can make for some nice profit figures.

 

[Chae1]

I’d imagine it will probably stay the same, when you go and buy 30/40/50 silage trailers per year you can negotiate quite a good price to buy them for, run them for 12months then sell on for the same money you brought for if not more, this makes the cost of ownership either nil or positive figures added with a hire charge can make for some nice profit figures.

This models worked particularly well the last few years when new prices increasing so quickly.

Imagine as price increases slow down, hiring machines out won't be as lucrative.

 

[thesilentone]

End of 2023

"Deere Reports Net Income of $2.369 Billion for Fourth Quarter, $10.166 Billion for Fiscal Year  Net income grows for quarter and full year, driven by solid market conditions, differentiated products, and strong execution.  Full-year 2024 earnings forecast to be $7.75 to $8.25 billion, as volumes return to mid-cycle levels.  Ongoing focus on structural profitability, investments that deliver customer value. MOLINE, Illinois (November 22, 2023) — Deere & Company reported net income of $2.369 billion for the fourth quarter ended October 29, 2023, or $8.26 per share, compared with net income of $2.246 billion, or $7.44 per share, for the quarter ended October 30, 2022. For fiscal-year 2023, net income attributable to Deere & Company was $10.166 billion, or $34.63 per share, compared with $7.131 billion, or $23.28 per share, in fiscal 2022. Worldwide net sales and revenues decreased 1 percent, to $15.412 billion, for the fourth quarter of fiscal 2023 and rose 16 percent, to $61.251 billion, for the full year. Net sales were $13.801 billion for the quarter and $55.565 billion for the year, compared with $14.351 billion and $47.917 billion in 2022."

 

[B R C]

Diversified businesses, both farming and supply industries are in a much better position to weather the cyclical nature of farming. Two big dealers near here, as well as in farming equipment are in groundscare, golf buggies, pickups, plant, tyres. Machines still need repairing and servicing, they may need to tighten their belts on the ag sales side and maybe a bit of a drop in profit, but I don’t think they’ll be going bust any time soon, they are well run.

 

[Tractorstant]

Dealers won't be able to reduce the price more than they purchased them for. They too would have been buying them off the supplier for a higher price. If you have good profits in the bank from last year(s) then you can bang a few machines out at a loss for some cash flow, but it's not sustainable long term.

 

[thesilentone]

 

[thesilentone]

Dealers won't be able to reduce the price more than they purchased them for. They too would have been buying them off the supplier for a higher price. If you have good profits in the bank from last year(s) then you can bang a few machines out at a loss for some cash flow, but it's not sustainable long term.

Why would they do that ?

 

[Tractorstant]

Why would they do that ?

Cash flow, and to get them off any floor plan ( stocking finance ) they might have. If you have a machine sitting in the yard, for a long time, it doesn't take long for the interest to mount up, and depreciation set in against others available. Take the hit and move on, if you can afford to.

 

[thesilentone]

Cash flow, and to get them off any floor plan ( stocking finance ) they might have. If you have a machine sitting in the yard, for a long time, it doesn't take long for the interest to mount up, and depreciation set in against others available. Take the hit and move on, if you can afford to.

A stocking floor plan for high cap-x equipment is part of a business plan, and already budgeted for. If you can't sell anything and panic for whole goods sales cash flow, and sell at a loss, you are on the slippery slope. Tractor registrations are down ytd v last year (which was a good year) but not significantly, and certainly won't be panicking any dealers at this stage.

However, seasonal equipment is another kettle of fish. Much of this comes from second-line suppliers, and has to be ordered in advance, and paid for, and of course if not sold 'in season' could sit for another year. Which is why I predict some interesting 0% schemes coming, if they don't then the indication is, they are not needed.

Much of the current negativity is down to the weather, which is hardly surprising.

The other question is, if your a cash rich machinery dealer, where would you prefer to have your money. In stock paid for, or in the bank ?

 

[Tractorstant]

A stocking floor plan for high cap-x equipment is part of a business plan, and already budgeted for. If you can't sell anything and panic for whole goods sales cash flow, and sell at a loss, you are on the slippery slope. Tractor registrations are down ytd v last year (which was a good year) but not significantly, and certainly won't be panicking any dealers at this stage.

However, seasonal equipment is another kettle of fish. Much of this comes from second-line suppliers, and has to be ordered in advance, and paid for, and of course if not sold 'in season' could sit for another year. Which is why I predict some interesting 0% schemes coming, if they don't then the indication is, they are not needed.

Much of the current negativity is down to the weather, which is hardly surprising.

The other question is, if your a cash rich machinery dealer, where would you prefer to have your money. In stock paid for, or in the bank ?

Your floor plan will only have so much capacity. and you would have budgeted maybe 18 months ago when interest rates were different. You are under obligation to take machines that you have ordered, to keep your franchise, a bit like a sausage machine.

Granted it's not ideal, but in business often your first loss is your best loss.

 

[oil barron]

To control the used machinery market. They sell all the new ones whilst taking the used ones in. Full control pretty much like what claas have been doing for years.

Claas were being underwritten by the German government so they could send second hand combines in to Ukraine.

 

[thesilentone]

Claas were being underwritten by the German government so they could send second hand combines in to Ukraine.

All the new one's, along with the NH and JD's ended up in a Country with stan in it's name.

 

[hendrebc]

Noticed in agritrader I think it was you could get a 125hp deutz that had been pre registered for 55k and add a loader for 4k. And interest free for 3 months down and then 57 monthly payments. 5 years interest free to buy a tractor must be a first?
Same magazine case were 4+ 44. I've only ever seen 3 years interest free before.

 

[David.]

But who are we kidding here, machinery is too expensive to buy, so extend the finance agreement another two years and kick the can down the road further.

 

[daveydiesel1]

Noticed in agritrader I think it was you could get a 125hp deutz that had been pre registered for 55k and add a loader for 4k. And interest free for 3 months down and then 57 monthly payments. 5 years interest free to buy a tractor must be a first?
Same magazine case were 4+ 44. I've only ever seen 3 years interest free before.

What model of deutz is that?

 

[hendrebc]

What model of deutz is that?

I don't know but I'll check if I can find the agritrader it was at mum and dads on the kitchen table yesterday. Bin day here so it might have been chucked but I'll be up there later I'll look.

 

[seedman stains]

Was at a meeting last night the discussion came around about the cost of gear apparently fendt have reduced the price of some of the bigger tractor models by a whopping 20k euros!!!!!!!!!!

 

[Lakesdigger]

Was at a meeting last night the discussion came around about the cost of gear apparently fendt have reduced the price of some of the bigger tractor models by a whopping 20k euros!!!!!!!!!!

You mean they've knocked a chunk off the list price, you'll still need paying the same just the discount will be less.

 

[warksfarmer]

Noticed in agritrader I think it was you could get a 125hp deutz that had been pre registered for 55k and add a loader for 4k. And interest free for 3 months down and then 57 monthly payments. 5 years interest free to buy a tractor must be a first?
Same magazine case were 4+ 44. I've only ever seen 3 years interest free before.

No such thing as interest free. You are paying for it somewhere.

 

[Bossfarmer]

Noticed in agritrader I think it was you could get a 125hp deutz that had been pre registered for 55k and add a loader for 4k. And interest free for 3 months down and then 57 monthly payments. 5 years interest free to buy a tractor must be a first?
Same magazine case were 4+ 44. I've only ever seen 3 years interest free before.

thats cheap in this day and age, what price would equivalent jd or fendt be?