The Combine Forum banner
1 - 20 of 53 Posts

·
Registered
Joined
·
4,919 Posts
Discussion Starter · #1 ·
Second round of JD layoffs today put over 900 in Iowa and Illinois unemployed. Looks like the depressed ag economy is catching speed fast. Wondering how other ag manufacturers are fairing, JD is big news here, others not.
 

·
Registered
Joined
·
2,269 Posts
It's not like there going to lower the price of new paint. Let them all go **** up
 

·
Registered
Joined
·
1,408 Posts
Second round of JD layoffs today put over 900 in Iowa and Illinois unemployed. Looks like the depressed ag economy is catching speed fast. Wondering how other ag manufacturers are fairing, JD is big news here, others not.
Wonder how many of those jobs were ones they added when things first started to pick up in grain prices a few years back? Seems to me those would have been the first ones they would cut but that's quite a few people out of work now.
 

·
Premium Member
Joined
·
6,087 Posts
The equiptment market could get ugly in Canada. With the amount of new equiptment in farm yards a lot of farmers could go without buying much for several years. With the Canadian dollar loosing value a new combine or tractor is going to cost a additional $50-100,000 on exchange rate alone.
 

·
Premium Member
Joined
·
3,107 Posts
Whenever our JD salesmen tries to pressure us into buying something because the new price is going up because of the exchange rate, I just kindly tell him that our used equipment is worth more also then.
 

·
Registered
Joined
·
3,507 Posts
The hard part, when u go years... Make sure you say no.. Because likely your used is more reliable then new...
If they get you to move up, it would be years of payments before you find something you trust.
 

·
Registered
Joined
·
1,146 Posts
Second round of JD layoffs today put over 900 in Iowa and Illinois unemployed. Looks like the depressed ag economy is catching speed fast. Wondering how other ag manufacturers are fairing, JD is big news here, others not.
Many have cut back before the big guys. Sales are down across the board for most commodity products. If one commodity is still hot, chances are thats what is subsidizing the rest of the farm.
 

·
Registered
Joined
·
98 Posts
The parts and service department are the only ones that will be busy at current prices. Feed wheat does not buy much.

The manufactures building less new combines and 4x4 tractors will help add value to our used ones. The next to new machines all lost way to much value in the last year because of low prices and to many machines bing built.
 

·
Registered
Joined
·
98 Posts
You want to talk economics just think about all the money we have all lost in the Oil producing regions because of -$1 basis. My farm alone I figure it's over $200,000 if the basis was at zero. Everyone talks about all the oil revenue but no one wants to give the real world numbers of revenue farmers have lost. I bet my implement dealer would love me if I had that money.
 

·
Premium Member
Joined
·
8,228 Posts
Whenever our JD salesmen tries to pressure us into buying something because the new price is going up because of the exchange rate, I just kindly tell him that our used equipment is worth more also then.
Taking a bunch of high priced trades and having the currency go back the other way is a great way for a dealer to go broke...

Dealers will continue to be careful on trades, farmers will not pay the current difference prices that are becoming more common, so......I see this equipment market getting really slow!

What needs to happen is for the price of new to stop increasing or even come down a bit to reflect what the price of used is doing. Lower grain prices should limit the volume buying of new paint that we have seen in recent years. But to do this the equipment mfr's will need to keep their costs down and keep the equipment less complex. Since that is somewhat unlikely things could get very ugly.:eek:

At least farmers can get some productive return out of a piece of equipment on their yard, dealers...not so much. I do not envy the equipment dealers at this juncture.:(
 

·
Registered
Joined
·
5,128 Posts
I won't bank on new equipment getting cheaper. Say JD reduces combine output, now there are fewer to be had so those in the market for new ones will still pay top dollar if they want that new iron. JD will need to keep the price up to pay for lost revenue due to less machines built. For example, a manufacturing division carries a lot of fixed costs such as the facility, engineering, management, r&d, utilities, etc that all need to be paid whether 10 or 100 units are built in the same period of time. When fewer are built then the margin goes higher because cost of producing that one unit has gone up yet the company still needs to make a lump sum of profit rather than thinking as a % of each machine rolled out the door. True, a guy can argue that cutting labour in all departments will reduce cost per machine but I don't think that is as big a cost per unit as all the other fixed costs.

I would think a likely scenario that could come about in a few years is like SWMan says, the manufactures may try getting less complex/expensive units to market by taking off a lot features and offering a basic and a deluxe model like you see with the JD row crop tractors.

If a company can't sell enough product to generate their needed revenue then selling that product for less is not going to help them unless their margins are presently at obscenely high levels. They need to figure out new ways that will get the product to sell.
 

·
Registered
Joined
·
1,146 Posts
I won't bank on new equipment getting cheaper. Say JD reduces combine output, now there are fewer to be had so those in the market for new ones will still pay top dollar if they want that new iron. JD will need to keep the price up to pay for lost revenue due to less machines built. For example, a manufacturing division carries a lot of fixed costs such as the facility, engineering, management, r&d, utilities, etc that all need to be paid whether 10 or 100 units are built in the same period of time. When fewer are built then the margin goes higher because cost of producing that one unit has gone up yet the company still needs to make a lump sum of profit rather than thinking as a % of each machine rolled out the door. True, a guy can argue that cutting labour in all departments will reduce cost per machine but I don't think that is as big a cost per unit as all the other fixed costs.

I would think a likely scenario that could come about in a few years is like SWMan says, the manufactures may try getting less complex/expensive units to market by taking off a lot features and offering a basic and a deluxe model like you see with the JD row crop tractors.

If a company can't sell enough product to generate their needed revenue then selling that product for less is not going to help them unless their margins are presently at obscenely high levels. They need to figure out new ways that will get the product to sell.
You can see in their quarterly reports they are working on dropping fixed over head because of the same reasons you list.

They may focus on over seas sales. I did see a picture of a JD dealer in china a fews months back from a guy I knew. Brand new 7700 design with a few modern twists. Very very basic machine, I bet the cost per acre to operate is low.
 

·
Registered
Joined
·
549 Posts
Second round of JD layoffs today put over 900 in Iowa and Illinois unemployed. Looks like the depressed ag economy is catching speed fast. Wondering how other ag manufacturers are fairing, JD is big news here, others not.
I am very close to Summers Mfg. their workers are only working 13 hrs. a week just to keep benefits.Hoping for a turnaround or some over Seas orders real soon.
 
1 - 20 of 53 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top