somthing to ponder on, tractor add papers

im looking at the newest tractor house mag, now, why are all these in there? john deere big high power stuff by the hundreds with 2 to 4 thousand hours, so, im assuming most of these are lease returns, but there are also hundreds of john deere skid steer loaders too, interesting that the Caterpillar ones are only a few,cat leases and rents equipment to, so why all the low houred jd stuff? then there is the small stuff,jd basically glorified riding lawn mowers up to 40 hp, im assuming the small Chinese loader tractors are there as when bought, the owners found then not to be up to the job intended for them and bought bigger tractors,but kubota is all over the pages too, new to well used,17 to 125 hp, and priced all over, i saw one that was tractor only, a 2006, listed for 3 grand more than the same hp unit sells for new with a package deal [ package deal includes the tractor, a loader, a box blade and a mower, plus the trailer its all sitting on for around 20 to 24 grand, depending on tractor hp, 20 to 35hp], kubota builds good stuff, from personal experience, so why are all of these for sale, some with only a 2 or 3 hundred hours on them, opinions and discussion wanted here

I guess some of it could be that the cheapest way to own new is to trade often while they're like new with low hours. Don't know what the one BTO here does anymore,but he used to like to trade with fewer than 2000 hours on a tractor.

Because farmers are making big money so they are trading for new paint to lower their tax liability. In my opinion they are losing money while trying to save money.

Just my 3 cents worth here. The BTOs are better off leasing for 3-5 yrs than buying (100% operating expense, verses depreciation).
As far as the smaller lets call them" hobby farm, and landscape tractors". Many people around here were riding the financial wave, and bought them as glorified lawn mowers, but then the wave hit shore. Also many so called landscapers bought bunches of these tractors, and there became so many of them that none of them could make any money, and when the economy collapsed, their customer base eroded also. The repo man has been busy!!!.
Once in a while I catch "machinery Pete" on RFDTV and amased at the auction prices, however a dollar doesn't buy much today compared to 10 yrs ago
Loren, the Acg.

You're probably right that the high powered stuff is lease returns.
As for the CUTs...lots of them in all colors with 200-300 hours on them. People build a new house in the country and buy those to do grading and landscaping. Once their projects are done they often sell the CUT and get something more suited to just mowing. Another consideration is lots of folks that build new homes get over extended. New house in the country, new little tractor, probably new appliances and furniture. The tractor and toys have to go so they can stay afloat financially.
The skid loaders are probably a combination of lease returns and small contractors trying to cut some costs.

Lots and lots of smaller contractors have gone out of business. The nationwide drought last year would have been especially rough on the landscaping and lawn mowing business.

I'm told that BFO's that are in debt to JD Credit Corp, have the opinion that they need to get rid of JD tractors before the hour meter gets to 5,000 hours because expensive engine failures start to happen after 5,000 hours.

Some of the ones that I know buy tractors with less than 2,500 hours and trade them again just before the meter hits 5,000 - with JD Credit, of course.

Contrary to some folks on here, I question whether the hobby farm segment is going to increase much in the future. I don't see a lot of folks who have any background that are interested or can afford to live the way I do. I could live cheaper in a subdivision, and have more money and time for vacations and hobbies. I see places on a few acres here selling cheap. Local tractor places seem to have a pretty slow inventory turnover for small stuff. There are only a few big farmers left, a very few folks milking. At one time, this was the biggest dairy county in the state. Not anymore.

whats a BFO

TAXES-In 2013 you are still allowed up to $139,000 in what amounts to is rapid depreciation-That is one of the reasons you see a lot of late model trades on dealer lots. This may sound like a lot but when a new combine with with heads is over $500,000 it is hard to trade a 2-3 year old one in for $139,000 difference! It is the same with tractors.

Have a friend who deals used equipment. Did some chisel plowing for him a few years ago, we quit using the JDs as they got to about 1920-1930 hours, value really drops on them at 2000.

Magnums, whole "nother story, no trouble selling an 8950 with 10-12,000 hours. That same spring he bought and sold 8 of them, and only three made it off the auction lots before he had them re-sold. One was backing off the trailer at his lot when it sold.

Some guys buy new equipment like most people change their underwear. Same friend bought three, one-yr-old, MX285s off a sale, less then 1000 hours on two, the third had 19 hours, and still had the little nubs on the tires. The guy, vegetable grower, had somewhere around 20 of them, replaced them all every year. Fully loaded, everything but the creeper gear. Heated leather seat, power mirrors, the works.

Seems to me you'd be better off buying a good 70-$100,000 tractor and using it a few years. Granted, there is no maintenance cost besides a couple oil changes, the way this guy did it, but on something like an 7250, 8950, as long as you keep the accumulators charged and fluids in it, they are pretty cheap to maintain as well.

Well the reason you see more JD and Bobcat skid steers than Cat is than Cat is not a major player in the skid steer market. I have seen the production numbers. Bobcat sells over 50% of the total market. Then JD, New Holland and all the others fight over the remaining 50%.

The low houred tractors. Well if you are running a lot of acres in a fast paced planting/harvesting window are you really going to be running tractors that are real high houred??? No you are not. That fact coupled with record high crop prices have made most farmer be able to update anything they want to.

Also remember that these newer tractor have fifty kinds of sensor and computers on them. Not many are going to want them when they are higher houred. Kind of like high miled cars that are loaded with the computer stuff.

Also you are reading a SALES PAPER!!! Why would you be surprised to actually see stuff for sale in it??? What do you think Tractor House gets paid for advertising??? Empty dealer lots???

The cost of those ads not cheap. So the advertisers are not going to advertising $500 junk antique equipment on there.

As to the low-houred small ones, as said below, many buy them and then find that they really have no need for them, and they are re-sold. Even if you do use it in a part-time farming situation they won't accumulate many hours, because there just isn't that much to do. We have horses, and have to spread manure- we'd always done it with old tractors, which was fine for me, but we needed something dependable that Mrs. (WA) could start and run (without having to hold your mouth right). Bought a new small JD compact utility in 2005, and it has about 120 hours on it now. Use it to bush-hog a few times in summer and a few other projects, then 10 minutes every weekend to spread manure over the winter, when they're not on pasture. We're 64 now, we've got maybe 5 more years of this fun, then it'll get sold with about 200 hours on the clock.

As to the big rigs, I think back to the late 70's, when I was a loan officer for PCA and dairy and crops were good. In retrospect (after the big shake-out in the early 80's), the CPA's and tax advisers probably put more people out of business than any other single factor. There was an Investment Tax Credit of 7% of the cost of the item off your income tax, as well as depreciation, for buying new stuff- and every farmer that had a good year was advised to go buy new equipment to minimize his taxable income. The bean counters were largely blind to the cyclical nature of farming- their mission is to minimize this years taxable income, and the devil take the hindmost. Of course, they couldn't make the payments when the bottom dropped out a couple years later, so we carried over part of the operating line (and they refinanced real estate) until they had used up all their equity, then came the farm sale.

It probably makes pretty good sense to lease the big items now, especially if reliability is really a factor after 5000 hours. As someone mentioned, its all deductible, you just have a "permanent" machinery cost (with little repair needed), you have machinery that gets the job done, and you can adjust the size of machinery every 3 years to fit your expanding (or contracting) operation. One big dairy farmer here, who put up lots of grass and corn silage, actually rented for a few weeks in the spring and a few weeks in the fall for the corn silage, and used an owned (but smaller) tractor for the grass through the summer. He had a deal with local Ford dealer- they'd have a used 150 HP from the lot, prepped and ready, for when he needed it. If it broke down, depending of the severity, they'd be there within 30 minutes to fix it, or with another tractor to swap until they could get the first one fixed. Worked great for him.

Big FiretrUCKING Operator

They sold those 25-40 hp kubota tractors with loaders to every yuppie who bought 10 acres and a house in the last 15 years.Now they lost there job,or are having a hard time making house,car,boat etc payments.They didn't have any use for them when they bought them in the first place.They couldn't come up with 3 or 4 thousand for a used tractor,but they could make payments on a kubota.Now there for sale buy the thousands.You can buy a nice L4300 4x4 with loader,200 hours, for 11000 around here.

im not suprised to see stuff for sale thats why i take the magazine but the post is about the trend in certain groups of equipment which shows up in larger numbers that the rest with low hours like either somebody bought it and cant pay for it,due to the economy and less work, or it the reason something like reliability issues in certain brands, for instance, ive seen a few of the cheap Chinese tractors with loaders around here, there not much tractor, they dont have enough power, and break down often then sit for awhile while parts are found which seems to be an issue on these, on the larger skid steers in this area jd, cat and bobcat are about equally represented especially if the unit is owned by a company or individual with larger equipment of the same brand , the company i work for has a cat skid steer, since they have Caterpillar big equipment too, there is also another skid steer called a thomas, ive run it some at their ranch but its the bosses wife's and it isnt allowed to get hauled to the company yard for use, for the jd guys we have a jd blade, its a 770 bn and its nice to run also

You ever used a Kubota? I have and if it'd had been mine I'd of put it up for sale too.

Just throwing a guess out here. How many were bought new with financing based on $6.50/bu corn? When the drought destroyed the crop, I'm guessing a bunchof smaller farmers couldn't pay the note. Naturally, BTOs with crop insurance are doing ok.

I always thought it stood for: Beat Frequency Oscillator .

Small farmers can't get crop insurance????????

(quoted from post at 17:40:30 01/27/13) Contrary to some folks on here, I question whether the hobby farm segment is going to increase much in the future. I don't see a lot of folks who have any background that are interested or can afford to live the way I do. I could live cheaper in a subdivision, and have more money and time for vacations and hobbies.

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Have to agree, Spook. I seems that segment is dying. People are struggling in this economy to just survive, let alone have some toys and hobbies at a place in the country. Used to be lots of new mini-farms being established in my area, no longer. It all might recover, but I'm not expecting it. We are within an hour of the big city so the commute isn't too bad (if you have a job), but with higher gas prices it certainly is less attractive.

We got into raising some llamas, we enjoy showing them and the wife uses the fiber for spinning, weaving and doing knitting and crocheting. We thought we might sell some babies too, but there is no market now, anyone that has them now has all they want and no new folks are interested. Over the last 4 years I think I've seen two new houses being built in my immediate area, one was a replacement for a fire damaged one. I've noticed too in the 11 years we've been here just about all the livestock operations have vanished. I guess they are too busy running crops to mess with cows and steers and hogs. I don't even see as many horses as I used to, with high hay prices I can well understand.

We will be in the market for a CUT with a loader at some point in the next couple of years, but have to pay off the truck (almost there) and the car (next summer) first. Don't want to get into debt to JD, NH or Kubota credit companies, so a good used one looks like the ticket. We are getting into our late 50s and a loader to help clean up the barn sounds pretty nice now and into the future. Doing it all by hand now, dumping into a spreader attached to a '41 9N and spreading or piling it about every 3-4 days. The old N is fine for that and maybe running a mower and a rear blade, but not much else.

I wouldn't trade where we live for anything but I don't think many other folks can trade up to our life anymore.