Hard times for tractor dealers?

brin · Aug 3, 2011

5030 said:
Interesting observation. City folk buy some acreage and become wannabe farmers. Don't have a clue and that's fine with me. They get some stock, usually horses (absolutely the worst thing to have), buy an underpowered tractor and some auction implements (not that they have a clue how to use them in the first place) and I wind up running their hay or selling them hay for their hayburners. All good for me. Successful farming is a profession, not a hobby. It involves many aspects, from a herbicide/pesticide applicators license to knowledgable soil testing and practiced conservation methods and a substantial investment in equipment.

I would never dream of owning any tractor under 100 horsepower except for mowing lawns. I believe the cheapest implement I own is a Krone 2 rotor gyro rake and that was 15 grand.

I read many posts on this site (and others) and chuckle. I find it amazing just how screwed up an ill informed and naieve person can be, not only in terms of tractor/implement maintainence but just trying to 'attempt' to do the basic jobs with an ill used implement and an underpowered tractor.

I see most people buy smaller tractors with hydrostatic transmissions and that's all well and good for light duty chores like a back hoe or a lawnmower, but for serious work, you need serious horsepower and a real gear drive, multi range transmission. Automatics are fine in cars but for ground engagement, no.

Keep moving th the sticks and keep calling. I have more than I can handle, but I'm greedy so I'll take on more. When I rool in with a mower and bailer that costs as much as their house (they always ask), they start to realize that farming is about professional equipment and professional methods.

It's almost impossible to make a silk purse from a sow's ear.

You are not a humble person are you ? I don't think you know what you are talking about ...I have cut, teddered, raked and baled hay for 30 yrs. and am here to say there is almost nothing you posted I agree with.

Dr_Zinj · Aug 8, 2011

supertuff said:
i agree - only one thing that concerns me - how long will fuel be available and affordable

Fuel will always be available. And affordability depends on your income, and the cost of the fuel.

If you're looking at a tractor as something to use when civilization ends, and yes, some of us quasi-survivalists do think of things like that, then go with a diesel as they are more of a multi-fuel capable vehicle than gasoline.

kco · Aug 8, 2011

Dr_Zinj said:
Fuel will always be available. And affordability depends on your income, and the cost of the fuel.

If you're looking at a tractor as something to use when civilization ends, and yes, some of us quasi-survivalists do think of things like that, then go with a diesel as they are more of a multi-fuel capable vehicle than gasoline.

Hmmmm.....I wonder if anyone still makes wood-fired steam engines.

dlmpsy · Aug 22, 2011

When I was tractor shopping I wanted to look at the 1643 as well, but the dealer did not have any and he was uncertain when they would get this model in (they were ordered). He kindly offered to try to find one and have it shipped in, but I declined because I didn't want him to go thru the trouble because I wouldn't feel right if I decided I did not like it. So, I ended up getting a different brand of tractor that was in stock from a different dealer. This process started back in Feb. or March, and the dealer still does not have a 1643 in stock, although he still has several different 1500 series on the lot. As to why, I believe it's a combination of factors. Since the economy is poor, many companies are cutting back on inventory, along with a reduction in labor to produce the parts. If I'm not mistaken, many of the 1600 series parts are made in Japan, and it is likely that the supply chain was disrupted (even if no plants were damaged). It also makes sense to push the old stock, especially since the 1500 series are being discontinued.

doall · Aug 24, 2011

I did not know we were losing money for the entire 35 years I have been helping bale( im now 40) . Plus the 60 before that that my grandfather and uncles were baling. Making anywhere from 10000 to 18000 bales per year. We must have "lost the farm".:laughing:

ultrarunner · Aug 24, 2011

In the central valley of California an acquaintance Uncle is a dealer and he told me the small tractor market has all but evaporated... on the other hand, he has sold more 200k and up units then ever before.

This year the rains were plentiful and evenly spaced, combined with some record produce prices... at least some of the big guys are doing ok...

bigbull338 · Aug 24, 2011

every1 knows when you have 2 or 3 bumper years,you replace the most worn equipment if you can.thats like round balers if you put more than 6000 bales a yr through them you replace them every 3 to 5yrs.

Farmwithjunk · Aug 24, 2011

I was reading a Univ of Ky School of Ag newsletter a few days ago where it said current (2011) "going rate" for combined worth of "major" OWNED equipment inventory amongst "upper echelon farmers" (interpret that however you might...) is roughly $500 per acre of operation. That's based on larger operations, predominantly cash grain operations, and doesn't take into account leased equipment. The number is based on a 10 year average of farm with profitable bottom lines.

That equates to (an AVERAGE OF) 2.5 mil worth of owned major equipment inventory on a 5000 acre farm...,

Using that formula gives a farmer with 50 acres about $25,000 worth of equipment to operate with if they want to remain profitable and NOT have to continuously invest monies earned off farm to stay in the black. And these numbers are for farms operating as a sole source of income rather than a hobby farm where the intent is to break even or make a SLIGHT profit.

You won't buy many new tractors and remain under $25,000 in equipment inventory....

Of course, these were averages, and NOT hard and fast rules. They include numbers from a few years that were somewhat less than profitable over the last 10 years. And they do NOT reflect every farm owners ability to earn above averages. I would think (based on my own experiences) a smaller "hay farm" operation does (should...) earn slightly more per acre than a cash grain operation based on 10 year averages.

I also see these numbers as a starting point rather than a line in the sand fact of life. But they do tell me that a small operation cannot buy a lot of new equipment and expect it to pencil out unless that small operation is WAY ahead of the curve. These numbers might not set you up for success in high profit years, but they do protect you somewhat in the event of a down cycle. And anyone who's farmed for a living knows we get our fair share of those down years....

The point was made in an above post, you buy new equipment in good years, but you stand pat in average years. That creates an "average" over time. Most farmers who were in business during the 80's will tell you it's better to take profits and reduce debt than it is to stock up on shiny new equipment when we have a good year. One good year does not make a trend....

And it also tells me that a big time operator with sheds full of new equipment better have a TON of acres and be making good money from every acre he farms, OR, have a wonderful off farm income. (or both...) And for every farmer who operates on the high side of the curve, there's one of us on the low side of that curve with older equipment (worth LESS than the average)

The report also sited several farm operations where owned equipment inventory worth was below $300 per acre. These were among some of the most profitable farms in the nation. Oddly enough, they had mostly newer equipment. They did farm huge acreage with very efficient modern equipment, much of it leased.

Dill · Aug 25, 2011

Overall I think 5030 had a valid point with the compact tractor market. It was a bubble. People had plenty of cash for a while, home equity was cheap, retirement was close and people were buying toys. Some were vettes or harleys but plenty of people didn't seem to mind dropping 20k on a little tractor. The dealers around here who jumped on the bandwagon of sub compacts are having a really hard time. Especially since they made so much money quickly some of the older smaller "real farm" equipment dealer's lost franchises to the this CUT dealer upstarts.

As for value of the equipment ya, I have 60 or 70k of equipment to make hay. My father's got another 100k we don't run big stuff or brand new stuff, but it needs to be good enough that we're baling and not wrenching.

Also 5yrs or so ago, I started seeing new people at all the auctions buying up old haying equipment. Usually the horse type wife with the checkbook just wanting to buy something quick and get home. We started losing fields to new operations. We've got all those fields back.