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  • Machinery cost per acre

    I was thinking of trading combines. The numbers we are talking work out to $64.74 per acre to trade.
    That is plus close to $10 an acre for parts. Is any one else near that high?

  • #2
    A/year ?

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    • #3
      I'm no where near that... of course, I have depreciated out all of my equipment already except my batwing mower, no-till ripper and skid steer.... I don't even own a combine... but I do have the cab off of our last one; I still haven't figured out what to do with it.

      All that said, that seems like it isn't completely crazy... I suppose that number will depend a lot on how new of equipment a person runs and/or how long they keep each piece. If one figures a million dollars of total remaining depreciatable iron and 2000 acres with a 7 year depreciation schedule it works out to somewhere in the $70s per ac per year. Are you talking just combine cost or total equipment costs?
      [URL="http://www.facebook.com/DiederichFarm"]DiederichFarm[/URL]
      "You are only as good as your next success, not your last" Sir Jock Stirrup

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      • #4
        Just the combine. No heads or fuel either Combine is an 09 bought used in 2011. With what I have been offered for mine I am thinking just buy another and keep this one for parts ! LOL ( I think) Definitely will keep the heads. Less than $5,000 trade credit for a head with 3,000 total acres on it against new one.

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        • #5
          Hmm. I'm no grain farmer but $64/are per year seems kinda steep for just a combine. I'm not sure how things go in IA but I can get people to come and combine here for less than $40/ac no problem... Maybe you'd be better off just hiring it done.
          [URL="http://www.facebook.com/DiederichFarm"]DiederichFarm[/URL]
          "You are only as good as your next success, not your last" Sir Jock Stirrup

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          • #6
            Gee with the numbers you posted I dunno.

            To me, a simplified version of the annual cost of owning any machine is-
            Loss of fair market value per year
            + repairs
            + labor to operate plus repair plus clean up
            + interest ( cost on a loan or lost from less dollars in the bank)
            + housing/shed room?

            Then you have to consider timeliness of harvest because of course there can be costs to a crop being in the field too long.
            You also consider near term savings on income taxes but keep in mind that the government will get any excess machine depreciation back when you downsize or retire (with a vengeance as any gain above depreciation is taxed as ordinary income).
            ----------------------------------
            Impossible to be exact on the above but the exercise is worth going through anyway as it helps one consider options.
            Take the numbers with the trade cost quoted to you and do some estimatin'.
            If you do the above and you are satisfied with current timeliness and added risks of downtime, the economics seldom suggest that you trade.

            $10 per acre for repairs sounds high but I haven't done any totaling for a few years and parts have increased a lot. (Pretty sure I don't average $10 per acre in repairs with some labor but----I really don't know for sure.)
            I definitely look at a combine trade longer term because the short term cash costs would cause one to never/ever have one. Kinda like buying a newer/ better home or god forbid trading in your wife for a new one- you better know what you are getting into before you make that move.
            I am 3rd owner on my current machine- JD 9760. About 3100 hours on the engine. I believe I might run this one until I think I am ready for a draper head for soy- or more capacity. The combine is of an age that the loss in fair market value per year will buy lots of repairs or put lots of savings in total cost in my pocket vs something much newer.

            Just added Calmer stalk rolls to the corn head. Wow do they shred corn stalks and leave a nice raggedy stump that won't blemish tires.

            On the custom combining comment-
            The biggest downside of custom combining other than the cost is loss of control over timing of harvest. Somebody has to be first and somebody has to be last. When something needs repair, everybody waits. For the custom harvester, it is a heck of a juggling act to keep everybody happy.
            “Democracy is the worst form of government, -------------------------------except for all the others.”

            ― Winston S. Churchill

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            • #7
              I was being simple about it. I started with low houred / new and was figuring cost to trade for another low houred / new machine divided by the total acres done over the years. My cost for a combine is probably high for a couple of reasons. One is small fields with hills and ditches. The second is I am small time and only run around 100 hours a year on it. I am oversized on a combine but many days it is just me, myself and I working. Myself and I are notorious for showing up after lunch. Dad does help but if it needs to go down the road I pick a load and haul a load.

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              • #8
                Originally posted by iadave View Post
                I was being simple about it. I started with low houred / new and was figuring cost to trade for another low houred / new machine divided by the total acres done over the years. My cost for a combine is probably high for a couple of reasons. One is small fields with hills and ditches. The second is I am small time and only run around 100 hours a year on it. I am oversized on a combine but many days it is just me, myself and I working. Myself and I are notorious for showing up after lunch. Dad does help but if it needs to go down the road I pick a load and haul a load.
                Well... by not having other labor costs obviously you can have more equipment costs (I'd know, that is why I run robotics and automate everything that I can). I don't know what comparable labor costs would be per acre so I could be very off... that still sounds expensive to me, especially given the low margin era we are in for corn/bean growing (or I am told it is low margin anyway, again, I don't have the inputs that others do because of my manure so my costs are lower to begin with).

                Maybe Jabber is right about how to look at it in terms of costs. Its not how I do it but if it cash flows well and provides a good income than who am I to judge?

                Using custom operators can be a challenge but in the realm of dairy where forage quality is king we (operators and dairymen) have found a way. Timing is more important for dairy forage than for any other feedstuff crop I know of. If it can be done here, it can be done. BUT that doesn't mean the operators elsewhere have it figured out or that it ends up on the right side economics wise when implemented elsewhere.
                [URL="http://www.facebook.com/DiederichFarm"]DiederichFarm[/URL]
                "You are only as good as your next success, not your last" Sir Jock Stirrup

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                • #9
                  I used numbers from Arnold's website to see what it would cost me to trade for something I would want...but not need.

                  They have a 2012 9230T(might need those tracks)with 1040 hours for $295,000.00. They have a 2004 8010 comparable to my 2003 for $119,000.00. That would be $176,000.00 to boot. I've had 10 very successful seasons with my combine at about 1100 acres per season average, that's 11,000 acres of use. $176,000.00 divided by 11,000 acres = $16.00/acre for me to trade...in theory.

                  Real world auction numbers would probably be more like $60,000.00 for my ole 8010? So even if I would take $295,000.00 - $60,000.00 = $235,000.00 to boot/11,0000 acres = $21.00/acre.

                  You need to run more acres dave, or run your current combines long enough so they become part of the family like I do.

                  My combine was depreciated out quite awhile ago, and with some luck it should only cost a couple boxes of sickle sections, a few guards, maybe some 134a, and an oil change, about $1000.00? That's $0.91/acre harvest costs for me this year. Fuel excluded of course. Or it could cost $60,000.00 if the darn thing totally grenades...$54.00/acre.

                  Our DMV gig is looking better every year.

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