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BA Deere
Honored Advisor

Can machinery be affordable with a $3 corn norm?

#breakfastwithbill touched on that a little about with a lower plateau on grain prices, can John Deere make combines and sell them for $100,000?  Because with the current prices, I don`t see how a $500,000 combine could harvest enough $3 corn to pay for it.  So, either corn has got to add a good buck in here somewhere or this new machinery prices are unsustainable.

 

Our inputs fertilizer, chemicals and seed (begrudgeonly) can go lower with <$30 oil, but so much of machinery is technology expense...I guess one way of looking at it, is "can you afford to plant straight rows if corn is sub $3"?   I guess in Brazil China Russia they have "no frills" machinery, , unless grain prices turn around perhaps Deere will have to go back to making open station 4020`s?  You know, I`ll bet they would sell pretty good if they did.

35 Replies
Jim Meade / Iowa City
Senior Advisor

Re: Can machinery be affordable with a $3 corn norm?

This is an interesting question.  A certain amount of the "frills" we see in modern equipment make operating them more comfortable and less physically demanding, which means older and weaker people can run them.  If we get back to open station tractors, it might be that we older guys would decide to move over and let the youngsters farm.  Smiley Happy

 

A fair number of McCormick tractors are selling around here for the very rasons you point out.

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BA Deere
Honored Advisor

Re: Can machinery be affordable with a $3 corn norm?

Maybe a young farmer program would simply be outlawing tractor cabs and GPS guidence, a farmer would be self-limited to the number of acres that he was willing to sit out in the elements to farm.   Smiley Wink  That would weed out the less than true believers. 

 

*I`m kidding in case anyone doesn`t know.

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r3020
Senior Advisor

Re: Can machinery be affordable with a $3 corn norm?

I've said that for a long time BA. If you want to end unemployment just out law anything bigger than an A John Deere and a 494A planter.

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westernia80
Senior Contributor

Re: Can machinery be affordable with a $3 corn norm?

This thread should be tied to the one about technology.  Maybe JD, CNH, and Agco won't go the way of some of their namesakes from the 80's but if I were an ag tech company I would be worried.

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BA Deere
Honored Advisor

Re: Can machinery be affordable with a $3 corn norm?

Smiley Very Happy  That would bring about "full employment", 3020.   I wonder if these low prices are with us quite a few more years, we`ll see machinery consolidations.  I remember when Case`s Tenneco parent company bought out International Harvester, that was a surprise, there were IH`s all over but "Case" Case tractors were rare as hen`s teeth.

 

Maybe a worldwide company that is already more tooled up to make no-frills equipment will have a edge.  Maybe Agco will be the dominate company when the dust settles?  "Massey Deere"?  Smiley Happy

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Blacksandfarmer
Veteran Advisor

Re: Can machinery be affordable with a $3 corn norm?

This is an interesting post BA. The most labor intensive piece of equipment I have is the combine. It would be nice to one day be able to afford a brand new combine, but I don't see that in my near future. I run a 1986 Case 1640 combine, if I could get that same combine brand new with an AFX rotor and chopper I would be a happy guy. But you cant buy a new combine that small anymore. A new combine here in the U.S has to be a monster with all the bells and whistles and cost $300,000+ (I don't price new so I may be a little off)

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BA Deere
Honored Advisor

Re: Can machinery be affordable with a $3 corn norm?

Hey Blacksand, I remember back in the 80`s a customer wheat harvester said "pull-type combines are taking over in the west!"  ..well, they didn`t.  However, i think that these companies should re-look at pull-type combines.   The combine engine, transmission, final drive is nothing..if it breaks you hook on with another tractor and off you go.   With cheap GoPros these days a guy wouldn`t be straining his neck, you could inexpensively watch the screens facing straight forward..and ahead of the dust!

 

Here is a very cool John Deere 7721 pull type in corn..of course you`d need a regular combine to break strips for you   Smiley Happy

 

https://www.youtube.com/watch?v=GyZIoevhM6U

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smokeyjay
Advisor

Re: Can machinery be affordable with a $3 corn norm?

You may have sticker shock when you do price one. Used ones with under 300 hours are about that.  😬

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smokeyjay
Advisor

Re: Can machinery be affordable with a $3 corn norm?

Perhaps a new paradigm can emerge; justify investment based solely on bottom line, and keep certain platforms, i.e., basic harvesting units longer term. Replace or update components rather than whole machines. Evaluate a machine's value based on ease of serviceability and adaptation to accept new components as technology changes.  For me, it's an idea already in practice, somewhat. There's no reason to replace propulsion components at 1,900 engine hours. All of my combines have been high hour machines and inspected/repaired as needed.  The only engine that was rebuilt completely was due to sabotage, and I sold that combine two years later for over double the price of the same used model. 

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