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Nw Iowa | What worked with 7$ corn will not work with 3.50 corn. It is pretty simple. For both dealers and farmers. I don’t think much of equipment being offered at auction since June was traded in to dealer with dealer expecting to take a 200000 bath on a combine or for that matter 150000 or more on a tractor. I think when a lot go to trade this fall, numbers will be different than what they were. I am guessing most X9’s were bought on mud deals but still 95% or more of net on most unless many, many units. I am guessing there was some 800-900 $ cost on them even with some MuD discounts. ( Dealer and customer loss combined ) . I doubt many did 30 acres a hr of good corn, 20 acres would be closer. 800$ a sep hr would be 40$ a acre, have to figure 10$ for the head, fuel of 3$ -4$ a acre, labor plus support equipment haul away 5000bu a hr. My guess cost will be close to 70$@ acre. I don’t think most have that margin just for harvest cost and above figures do not include interest, ( even if paid for still have to figure 5%) only depreciation and operational expense and I think I am being conservative on above numbers. It isn’t just the class 10 combines, it would include a lot of 780 and 790 combines as well, alittle less depreciation but still huge depreciation. If you don’t have the profits from 7$ corn, the tax deduction on the new combine is going to be a lot less with 4$ corn. These are corn numbers, I know nothing about wheat costs.
I am not saying they won’t sell new combines but guessing the market for new will be considerably less which in turn will dry up alot of used. I will also say that dealers offering these very low hr combines ( under 500 hrs) at auction will dry up as inventories start to get in line. I heard Deere is going to increase prices another 3%? Seems like they are just putting some more holes in the boat. | |
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Class 10+ Combine Depreciation. Specifically X9 and new AF11
