New lexion price !

[Johnnyboxer]

Personally have spent very little on machinery this year as we set up for changes that we anticipate due to Brexit. (Currency movement being one)

Probably this way for next 2 years barring major breakdown.

You aren't alone
Most Dealers aren't as busy as they like to make out

 

[Tim G]

How much area would you need to justify a new combine nowadays? When I last looked on our 200ha it was way cheaper and easier to get a contractor than buy a new machine every 5 years. Assuming a new machine is £200k, and worth £80k after 5 years that works out @ £120/ha just in depreciation alone. I would need at least 10years ownership and bloody good residuals to even get anywhere near breakeven on a contractors rate. I would guess a £300k machine worth £150k after 5 years over 400ha would just about work? Doesn’t leave you much over to to run one through.

Do many 500ac farms justify a brand new combine every 5 yrs? I'd have thought you'd want to be buying the 5yr old one and running it for another 10 at least.

 

[tw15]

Bet class are giving out their own calculator with every new enquiry for a combine so you can work out the figures and when you press = it says buy one you will be the best farmer with the biggest bank balance in the county .
Ohh I think you may just need a very lenient bank

 

[Steevo]

was thinking this myself if your using it for 2 weeks of the year youv far too much capacity... most cereal growers will be harvesting for atleast 8 weeks a year ....

Many on here have been harvesting for 8 weeks already....and 5 of those weeks it’s rained!

 

[Honest john]

I suspect the finance would be the stumbling block for most in that situation.

Getting half a million quid for a new Lexion 8900 is going to be relatively straightforward assuming your credit report isn't a horror story.

Getting £400k for a pair of mid-life 780s is a much bigger hurdle, even for those with a clear credit history. It's just a much bigger risk for a lender, as the resale market if the borrower defaults is going to be limited.

If you have the cash or a suitable line of credit then it seems like a no-brainer to me, but the same is true of most "big ticket" equipment purchases, regardless of the industry - it's almost always cheaper to let someone else take the depreciation hit and then buy it while it still has plenty of reliability in reserve.

Good point.
You need the cash or OD to pay for the used kit.

I am in the same position.
My machine cost 155K, a some size replacement would cost more than double that today.
Same for Potato Harvester.

We can write off 1 million per year profit in accounts now, but tax rates are coming down to 19%.

Another problem is the industry just doesn’t have numbers of skilled people to keep the old kit in good order.

 

[nick...]

Be great having a massive combine for say 3000 acres but get a wet week or two and then the panic sets in.may have to cut some wet,ltd drying facilities and storage.struggle to get grain of farm like lots of us have this year and all of a sudden getting a contractor in to help and more expense.woukd worry the hell out of me.maybe some in this predicament already.harvest seems to get earlier every year and I can remember in the past us cutting wheat in mid September when we want to be doing land prep and start the cycle all over again.
Nick...

 

[Clive]

Considering a second 770 / 780 here. It would be massive over capacity but way cheaper than trading up to a new 8900.

if you have labor to run it it is a far better bet I think

 

[D14]

How much area would you need to justify a new combine nowadays? When I last looked on our 200ha it was way cheaper and easier to get a contractor than buy a new machine every 5 years. Assuming a new machine is £200k, and worth £80k after 5 years that works out @ £120/ha just in depreciation alone. I would need at least 10years ownership and bloody good residuals to even get anywhere near breakeven on a contractors rate. I would guess a £300k machine worth £150k after 5 years over 400ha would just about work? Doesn’t leave you much over to to run one through.

The problem with that though is that you then become p[art of a much bigger harvest because the contractor needs probably 1200ha to justify the big combine. Your then waiting loosing premiums etc. Far better to buy a £50,000 combine and spend every winter on it then cut your own corn when you want to cut it. In a wet year you'll finish earlier than the contractor because you'll got and do a bit whenever you can. The contractor can't be moving around the roads 3 times a day trying to find dry stuff to cut.

 

[D14]

Good point.
You need the cash or OD to pay for the used kit.

I am in the same position.
My machine cost 155K, a some size replacement would cost more than double that today.
Same for Potato Harvester.

We can write off 1 million per year profit in accounts now, but tax rates are coming down to 19%.

Another problem is the industry just doesn’t have numbers of skilled people to keep the old kit in good order.

In 2014 we bought a used machine that was 8 years old and then financed it for 6 years. There was no issues getting the finance in place. We did it because money was cheap then and it allowed us to use the money in the bank we could of paid for it with for something else.

 

[Clive]

How much area would you need to justify a new combine nowadays? When I last looked on our 200ha it was way cheaper and easier to get a contractor than buy a new machine every 5 years. Assuming a new machine is £200k, and worth £80k after 5 years that works out @ £120/ha just in depreciation alone. I would need at least 10years ownership and bloody good residuals to even get anywhere near breakeven on a contractors rate. I would guess a £300k machine worth £150k after 5 years over 400ha would just about work? Doesn’t leave you much over to to run one through.

Contractor rates (which are too cheap) are £35/ac around here and I can see that being £40 soon - so 3000ac would cost you £120k pa contractor bill - which I would say cover a far bit of depreciation and finance on buying but you also have labour, fuel, breakdown, annual maintenance to consider ..................................... so you are right IMO even on 3k acres just get someone else to take all that risk maybe ?

and if it doesn't stack up on 3k acres with a contractor at £40 who on earth can it stack up for ? VERY few UK farms are putting more than 3k acres through a single machine I would suggest in reality

 

[2wheels]

Probably! I know we were getting £100/ ton for feed barley in 1996 the year we sold up .

got £100/ton for wheat back in 1984.

 

[sawdust]

Fair play for the PM @Rowland . He wasn’t talking of pound sterling!

Ah, Pesetas, that explains it.

 

[Chae1]

How much area would you need to justify a new combine nowadays? When I last looked on our 200ha it was way cheaper and easier to get a contractor than buy a new machine every 5 years. Assuming a new machine is £200k, and worth £80k after 5 years that works out @ £120/ha just in depreciation alone. I would need at least 10years ownership and bloody good residuals to even get anywhere near breakeven on a contractors rate. I would guess a £300k machine worth £150k after 5 years over 400ha would just about work? Doesn’t leave you much over to to run one through.

You don't have to buy a 300k machine to cut 200ha. We bought a 110k machine 10 years ago to cut 900 acres, Its now worth 50k but depreciation seems to have stopped dropping so quickly. Just fear of a big repair bill.

Going rate for contractors up here is £40/acre, small fields and short days though.

 

[Grass And Grain]

You don't have to buy a 300k machine to cut 200ha. We bought a 110k machine 10 years ago to cut 900 acres, Its now worth 50k but depreciation seems to have stopped dropping so quickly. Just fear of a big repair bill.

Going rate for contractors up here is £40/acre, small fields and short days though.

We paid £6,500 for a machine, sold it 15 years later for £5,000, and used to cut 400 acres/year with it (25 pence per acre in depreciation). Probably realistically spent about £1,500 per year on parts (£4/acre).

 

[Captain Slack]

Will anyone actually hand over £500,000 cash... I doubt it. They will lease it

Will anyone actually hand over £500,000 cash... I doubt it. They will lease it

I was in a farm office a couple of years ago, the class rep was there and had just sold a combine, he then started quoting finance deals. The farmer said ill teach you about finance, you bring me a combine and ill give you a check.

 

[nick...]

I was in a farm office a couple of years ago, the class rep was there and had just sold a combine, he then started quoting finance deals. The farmer said ill teach you about finance, you bring me a combine and ill give you a check.

I could guess who that is and certainly know someone who does this
Nick...

 

[Wombat]

I could guess who that is and certainly know someone who does this
Nick...

I know of someone locally who bought a class mega 20+ yrs ago in notes

 

[holywell farmer]

Does anyone think combines will get over the 600-000 pound price mark someday

 

[nick...]

As sure as the sun rising
Nick...

 

[MJSCCOLLINS]

if you have labor to run it it is a far better bet I think

The extra machinery and labour over the life of the machine(s) would kill the idea of running two, depends if you wish to feel like you're saving on the purchase date, or at the end of the machines life. Two machines on our setup would need 4 18T trailers, which is 2 more machines and men than current. Ways to get round it? Chaser bin? Would need a 50T bin to make sense...