Test What is the actual depreciation on a new combine? Test

Machinery & Equipment


What is the actual depreciation on a new combine?

Sep 6, 2015 | 11:25 1 Just having a dicussion with relatives about cost of machinery. I am so far removed from new equipment values, I only buy equipment that has no depreciation left, so don't have the numbers.
But what would the real depreciation per year, or per hour be on a new class 9 or similar combine? Second question, how many acres/bushels/hours per machine would you personally need to justify that depreciation #? Reply With Quote
Sep 6, 2015 | 11:33 2 I will probably get lambasted for this but the only real depreciation is the difference in value from the real purchase price to what it is sold/traded(real value) for when you let it go.

Purchase price less book depreciation plus recaptured depreciation(CCA) equals true cost. IMO!!

Now if you can see the real value through the smoke and mirrors of flipping equipment through a "dealer"... Reply With Quote
ado089's Avatar Sep 6, 2015 | 12:07 3 Optimistically $45k/yr probably closer to $55k. Reply With Quote
Sep 6, 2015 | 12:16 4 Yes, but what is that #? If I paid cash no trade for a new class 9 at a dealer last August then sold it at RB this August, how much did I lose? Someone posted new prices of nearly 900000 here a while ago, yet 1 or 2 year old combines on RB are in the 2 to 300000 range. Reply With Quote
fjlip's Avatar Sep 6, 2015 | 12:47 5 Cash price for a S690 $486000 CAD. Use it two years with 500 separator hours and I'd WAG Ritchies would get $300000, therefore real depreciation = $186000 that some body used up. Or $372 per hour. At 20 acres per hour, 10000 acres, = $18.60/ acre. Did that combine make enough profit to pay for it self?
How does that math sound? Reply With Quote
Sep 6, 2015 | 12:52 6 Altafarmer5
I have wondered about this myself. I hope you get an answer. I think you are way high on the purchase price and maybe a little low on the Richie price. I suppose another factor is the fact that Richies don't sell it for nothing either. They need their commission.
I'm only in the used market and would be interested in the economics of the new machines Reply With Quote
Sep 6, 2015 | 13:05 7 486000 cdn and what about a header?

Pickup and header cost has to be another 150000.

10000 acres at 20 per hour is 500 separator hours. Pretty rare to see a 1 season use combine with 500 hours. Usually 300. Now the math is different.

I think SF3 should have an answer for this. Reply With Quote
Sep 6, 2015 | 13:13 8 4 for 4 combines last year for $156,000 or $39,000 per machine. 225 separator hours.
I'm sure guys doing 10 machines or more at a time do better than that. Reply With Quote
SASKFARMER3's Avatar Sep 6, 2015 | 13:21 9 Jake your correct on the 4 for that difference!
But with our dollar the machine is now almost 600000 that's when I decided to quit multiples! New quad comes in at 727 with the dollar!
New is a thing of the past for this farm'
Now yea I did use the bumper to bumper three year deal so F$&k trading!
Plus with this low dollar wheat at 5 U.S. Or 5 Canadian kind of tough to compete!
Also a old deere 9600 sold this fall for more than I paid new for one! Hell a 4020 power shift is worth more than what we paid new! Reply With Quote
Sep 6, 2015 | 14:41 10 yes that was just before the dollar started tanking.

Never got a price to trade again this year yet. If it's to big of jump it won't happen.

These Ag companies need a wake up call. I don't know why GM and Ford etc can hold same price on vehicles for example and yet right away we have to pay more for equipment. Reply With Quote
Sep 6, 2015 | 17:58 11 Add 30% from last year Reply With Quote
fjlip's Avatar Sep 6, 2015 | 18:01 12 That's the quote I heard with PU header, and I say after 2 years at 250 hours/ year. One unit, current $0.75 CAD. Reply With Quote
fjlip's Avatar Sep 6, 2015 | 18:08 13 SF3 you are low on the 9RX, need to add the options like cab, auto steer, lights, hydraulics and tracks,

http://www.thecombineforum.com/forums/attachments/tractors/64954d1440675902-jd-9rx-get-your-check-books-ready-9620rx-loaded-cad-.jpg Reply With Quote
Sep 6, 2015 | 18:44 14 Was quoted 724000 for quad. Reply With Quote
Sep 6, 2015 | 18:58 15 Huh - and we thought $30,000 for new tires on the ole tractor was a bit much - lol Reply With Quote
Sep 6, 2015 | 19:16 16 Will be many 200hr class 9 machines 300k after harvest I bet
KillamJD local 690 with pickup $344k big banner sitting up front lots to choose from. Drought slowed things... Battleriver Implements ltd Reply With Quote
Sep 6, 2015 | 20:09 17 Using Buckets numbers
Combine 486,000
Headers 150,000
Total new cost. $636,000

Assuming 10,000 acre farm / 3 combines = 3,300 acres per combine

If jake says $39,000 per combine I'll use $50,000 per machine for ease and conservative?

$50,000 / 3,300 acres = $15 dollars acre

if you listen to the chemical dealers that's just over a bushel per acre (current justification or decision tool to apply fungicide or not) Reply With Quote
Sep 6, 2015 | 20:27 18 RareEarth,

That sounds like reasonable math. Its much less than paying custom work. So it still pays to trade multiples, plus warrantee. So if it breaks Or throws a code , you just call the dealership , you dont even have to get any dust of chaff on you. Reply With Quote
biglentil's Avatar Sep 6, 2015 | 21:36 19 So your saying your $636k machine will fetch $586k at Richie Bros the following year? Seems highly optomistic, I would say around $425k is more likely or a 65 an acre. Reply With Quote
Sep 6, 2015 | 22:04 20 Maybe that's why you flip through dealer?

Then there is the up front cost to play that game,
$636,000 per combine. Reply With Quote
Sep 6, 2015 | 22:23 21 $39,000 to trade 225 separator hours is ridiculously cheap. About time the dealers got there balls slapped and woke up to reality.

Next guy in line to trade will pay 50% more than that. Very few machines will have less depreciation in year 1 than years 2 and 3.

So good deal to trade for $39,000 but hopefully that number is closer to $72,000 next time to be closer to reality. Reply With Quote
Sep 6, 2015 | 22:26 22 Prices on green are going up another 4% on Sept 12. Better order while they are still cheap. $39k on a one year trade is $25k cheaper than we are quoted in our area. Even with a multiple. I can hear crickets at the dealership. Reply With Quote
Sep 6, 2015 | 22:33 23 When the "exchange" pushes up the grain prices everything will be equal again.

You pick what I mean by exchange. Reply With Quote
Sep 7, 2015 | 07:04 24 That was on S-670's I'll point out. Not the 680 or 690's and involved other pieces for a multiple but that was the price on the 4 combines.

We won't be trading anything this year if it's up 30% that's for sure!! Reply With Quote
Sep 7, 2015 | 08:17 25 I use $250 per set hour. Reply With Quote
Sep 7, 2015 | 08:18 26 250 per separator hour Reply With Quote
Sep 7, 2015 | 09:40 27 So if the new combine is "only" 465000. The info in the new equipment thread on agriville was apparently incorrect. I just checked RB, Canada only, all classes of combines, 2014 combines (2 of them) sold for between 225 and365 CAD.

Only 10 out of about 70 of the 2013 combines sold for more than 300,000 the rest were under. The lowest being 150,000. Nothing over 400,000. But those sales were in a higher valued CAD.

So if the dealer is letting you trade for 39,000 per year (2 year) and selling the trade at auction for either side of 300,000 minus commissions. they only lost close to 100,000 on the deal. something doesnt add up. Reply With Quote
Sep 7, 2015 | 09:53 28 AlbertaFmr,

I agree... the Manufacturers/dealers are using a marketing ploy. Won't fool our farm... good 3yr old iron with updates will last for a decade... not one or two years. Clean burning and no Urea/added emissions equip to break down. Reply With Quote
Sep 7, 2015 | 11:05 29 Cash price on a S-670 with almost all options including the pick up header was $355k at the time of the $39k per machine deal.
A 680 at that time was about $35,000 more but on our farm we'll pass on the rethresher idea the 680 and 690's have.

None of this $5, $6 or $700,000 nonsense.
I've never met anyone yet that pays full retail for a piece of iron and I doubt anyone on here ever has either. The bigger numbers sound better for people who frequent coffee row. Reply With Quote
fjlip's Avatar Sep 7, 2015 | 12:59 30 And with today's CAD, with PU, I was quoted $486000 cash for one 690. Up about $60000 since you bought, but just one. Reply With Quote