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Best Time Economically to Purchase Combine

8K views 22 replies 18 participants last post by  Haystack 
#1 ·
Interested in others thoughts on the economics of combine ownership purchase timing
i.e. buy a new combine and use for x number of hours or acres and buy new again, versus buy a couple year old one with say 500-600 hours or buy an older 4-10 year old one with 1000-2000 hours on it.

I kind of think it will depend on farm size but it really should not vary all that much based on farm size if you break it down to cost per acre assuming similar crops.

I have typically purchased combines that are about 4 years old with around 800eng hours on them and kept them anywhere from 3 to 7 years, I have looked at my cost per acre for depreciation and repairs and oil changes, did not include interest, or fuel, and my cost has varied from 6 to $10 per acre. To be fair I have done virtually all repair work myself, so the repair cost would be higher if I had to hire the services done, and to date I have not had an unexpected major failure such as a motor or transmission.

I understand the reliability argument that their is a greater chance of downtime with an older unit, and I agree in general but only to a degree. If a used combine is gone through prior to use and repairs made I am not sure there is a significant chance of increased downtime, especially compared a brand new one, the neighbors I talk to that buy new have the dealership in the field quite often the first year getting the kinks out of the unit. I will agree that in general a newer combine should be less likely to have an unexpected breakdown than a new one, and that downtime must be taken into account.

I would be interested in what others see as the best time to buy and corresponding cost per acre. I am small grains with pulses, canola, and cereals.

thoughts
 
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#3 ·
When we last ran the numbers some years ago, seemed like no matter which way we went, either trading on slightly used machines every 8 years or so, or buying new every 2 or 3 years, it worked out to over $50k. In other words, keeping the machines longer meant less trade-in value and more difference. My feeling is that in recent years that annual number has risen. With used machines running up to $450k, the numbers are getting hard to swallow. I'm not too keen on the idea of frequent trade-ins. Just when I have the machine broken in and working the way I like it, it would be time to trade and start all over.

People like to complain about how machines wear out so fast these days, but the fact is, our latest machines are lasting way better than the machines 15-20 years ago while doing more. Yes we have to replace high wear parts like the transition cone, vanes, etc. And augers and elevators will still wear out eventually. But it looks to me like we can economically run these machines much longer than we used to. In the last few years we haven't had any major breakdowns.

Watching auctions the last few years, the decent combines in these November auctions seemed to go for very good prices compared to dealer offerings. The time is coming when we will need a third combine to help with some specialty crops; I think it will probably come from an auction rather than a dealer. If you're careful there are good deals to be had there.
 
#4 ·
I'm not so sure owning machines is the right answer anymore. For the first time we are seriously looking at using custom. The cost of ownership on equipment just doesn't pencil out for us. Our 2 machines are 23, and 24 yrs old, and will soon need to be replaced, but hard to pencil it. That, and finding good help...makes custom seem like a viable option which I never thought I would say, at least not till I was so old that I couldn't climb up myself.
Lots to consider in this conversation, and there are more opinions on this than there are on Trump
 
#6 ·
We traded 2 seasons ago, 3 year old machine for 1 year old. Cost of depreciation per acre harvested was anywhere from $23/acre to $50. Huge variance on what they would give for our used combine. It only came down to somewhat reasonable numbers when they new they had a buyer for our combine when it got closer to harvest (I am pretty sure they had ours sold before we even made a deal). I would of thought that this time of year was best to buy, but just before harvest was when I got the best price.
 
#7 ·
Sometimes you get a machine and you just know it's a keeper. It runs smooth and quiet and causes very little trouble. There is no reason it can't go for many thousands of hours if it's maintained. Then you get one that is just a pain ita and you know it needs to be upgraded asap. Half the fun is watching what stuff trades for and getting new toys. By the time you get all this figured out its time to quit and let the next poor s--, I mean farmer figure it out.
 
#9 ·
Unless crop are getting crazy high again , I don’t see many new combines selling very fast at those prices (cad) maybe us farmers look different at it ?
Think Custum cutters have a new market here in Canada coming .
Always bought combines with 500 ish hours , paying cash .
This market is to scary , it’s to much and depreciation is to high .
 
#13 ·
We usually trade every 3 years or so but have 4 seasons on ours now and will likely keep it one more, don't buy new but try getting one a couple years old. After the last couple harvests, I'm afraid to look at used machines knowing what they have been through.
 
#14 ·
Yes many used machines have had the fun driven out of them this past fall. If it wasn't the mudbining it was the snowbining. As well as the toughest straw conditions imaginable. Conditions like that really take its toll on equipment and you could be buying yourself a real headache. I do know that parts are ridiculous for all this newer stuff so if you must purchase anything, new might be the answer for your operation. I just know there is no money in my operation to even consider new. In my situation of running older combines a jump to new is to great. If you are the 400 hr guy, then your cost to go new is far less than a guy like me, with my combines worth the interest on a new one for one yr lol. Just keeping what you have in times like these just makes more sense in my world. You know how many times you plugged things and got stuck. You know if you needed an excavator to dig your combine out. You know if you tore your wheels off towing it out backwards. If your that guy your combine will end up on a lot or RB. Do you want to be that bidder?
 
#15 · (Edited)
Yeah buying used does require some care and deliberation. Careful inspection, paying for a dealer inspection or independent mechanic before the auction. Can get a lot of information out of the computers these days also, especially on tractors.

I know my machines well enough to know where the weak spots are and what to look for, and what disasters to watch out for. I strongly suspect evidence of the axles being torn off and re-welded on would be found. The combines I saw these last two falls at auction were local in origin, so I know a bit of what they went through these last couple of years. I would have had very few qualms about bidding on a few of them. Maybe the secret is to look for used machines coming out of S. Alberta. Our harvest weather wasn't great but it wasn't anything like many of you.

But your point is well taken, especially when looking at machines coming from areas where conditions were very harsh.

I would be hesitant to buy a machine at auction that I had no previous experience with. Buying a different color I mean.
 
#18 ·
western moved some good equipment at saskatoon , I always seem to do better at that sale than others. Bought a combine last year ran like a top, put 6000.00 into it when we brought it home to put in good shape. It was 150,000 less than dealer wanted.Spend a couple days before the sale and go through them at the site
 
#20 ·
its a tough one. I lease, only way I can afford newer machine. I had planned on buying this one out, but after running numbers, I ended up leasing a new one again. 20k a year more payment than purchasing mine, but brand new, 5 year warranty, automation and zero hours vs 2000 hrs, an 28k rebuild this fall, and who knows what unexpected, expensive failures (possibly none, but who are we kidding). if one gearbox goes out on a 9240, youre talking around 8k Ive heard. One or two of those in the next 5 years, plus the hopefully added bushels with automation, made my decision to upgrade. No idea if its right though!
 
#22 ·
Great topic. Aways find it interesting what logic people use to make equipment replacement decisions. Particularly how one guy thinks it's time to get rid of a machine and someone else decides it's time to acquire that machine. Same machine but one guy doesn't think it's worth keeping and another thinks it is worth acquiring. Of course farm size can have a huge bearing on the difference in perception.
 
#23 · (Edited)
From what I have observed, I think every operation needs to remain open minded about the combine replacement question. I’ve seen it be the right decision to go from one combine into two when personally I thought the tractor and drill should have been upgraded first and continue using some custom combining, to trading to get a matched pair, to trading in a pair of year old machines for two brand new ones and all headers just to get longer unload augers and wider headers, to keeping those same machines repaired and sometimes patched and welded up for 8 years, just because they were so dependable and good in their time.



But there comes a time to learn from all lessons and accept that the sky isn’t actually falling at the moment, but if it did, you know there are ways to survive it. At the place I sometimes hang out, I wouldn’t be surprised if the newest policy will be to trade machines and headers every 3 years and buy extended warranty. The right decision, for the anticipated harvester work load should consider the equity position to avoid taking excessive risk in either under investing or over investing. Both risks are very real, but there is a large middle ground between extremes. The gross harvester costs per acre can easily become a critical decision in financial success. It’s more important than the mechanics of it all.
 
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