New Tractor Sales Are Declining

[rScotty]

You might have missed the original conversation. It wasn't about farmers, it was about what kind of experience made a person able to give good financial advice to prospective farmers.

It went like this:
"Now if I wanted farming advice, that's different. I'd probably look for someone who used to farm, made a success of it, and now was doing something else."

SNIP...

Well, I'm learning something too. Several things in fact. One is that although the original post was about how we learn about financial things, none of the replies were about that. Every reply was about how it was more desirable to continue with a career - specifically a farming career - instead of becoming sucessful and then doing "something else".

Apparently I really hit an unexpected nerve. I honestly thought that freedom to do other things was the reward of becoming successful. Success being free time and money enough to have freedom to travel, study, pursue hobbies, help others - or just do whatever a person sees as being the next step.

But it doesn't seem so. Apparently I am wrong on that. Just because that was my own view of success I had assumed it applied to others as well. Not so.

pondering....rScotty

 

[Hay Dude]

Well, I'm learning something too. Several things in fact. One is that although the original post was about how we learn about financial things, none of the replies were about that. Every reply was about how it was more desirable to continue with a career instead of becoming sucessful and then doing "something else".

Apparently I really hit an unexpected nerve. I honestly thought that freedom to do other things was the reward of becoming successful. Success being the freedom to travel, study, pursue hobbies, help others - or just do whatever a person sees as being the next step.

But it doesn't seem so. Apparently I am wrong on that. Just because that was my own view of success I had assumed it applied to others as well. Not so.

pondering....rScotty

It’s because farming is different to most farmers than a typical career is to most other people.
Not to say other careers can’t become one’s passion-they can.
But I can tell you this-despite the low pay, long hours, bodily injuries and stress, there’s nothing like farming.

Nothing.

 

[scootr]

Well, I'm learning something too. Several things in fact. One is that although the original post was about how we learn about financial things, none of the replies were about that. Every reply was about how it was more desirable to continue with a career - specifically a farming career - instead of becoming sucessful and then doing "something else".

Apparently I really hit an unexpected nerve. I honestly thought that freedom to do other things was the reward of becoming successful. Success being free time and money enough to have freedom to travel, study, pursue hobbies, help others - or just do whatever a person sees as being the next step.

But it doesn't seem so. Apparently I am wrong on that. Just because that was my own view of success I had assumed it applied to others as well. Not so.

pondering....rScotty

Some careers are more than just a means to a ways. If a man is a farmer or a rancher, they are so at heart. There will be nothing else that will nurture and feed him like that career does. New farmers are not farmers in the traditional sense. Traditional farmers are born into farming. If there is a roof overhead, food on the table, tractors in the barn, crops in the fields, and rain on the way. They are successful. And that just means good times for them because God knows there have been bad times getting to the good times. The hours are long, The work is hard. The pay can be very low. We all like to eat. God bless the farmers.

 

[Torvy]

Exactly
And if that’s their marketing strategy and it works, more power to them.
But I maintain there’s no “free” financing. It‘s paid for in the sales price.

Here is the thing. Marketing strategies are in the aggregate, not on individual sales. No brand 'eats' the cost of anything. All expenses (like taxes) are paid by the customers, employees, or owners. The zero percent strategy allows me, as a excellent credit customer, let some other schmuck pay for a wee bit of my purchase. Not everyone gets zero %. So while 0% isn't 'free', it is often the best deal, all else being equal.

At the same time, it is a strategy that allows lenders to make more money (again, in the aggregate) because that is how risk portfolios work and how they are regulated by gubmint.

I agree that Kubota (and JD) have believed their own press clippings so long that they figure they deserve to price higher. They can do this because of a marketing psychology phenomenon wherein a certain subset of buyers assume higher prices equal higher quality.

This is not a new concept. Upton Sinclair wrote about it in The Jungle. In his example,iirc, there was literally no difference between the 'premium' sausage and the economy sausage. Just a label and the perception based on price that a product is better.

You see it here frequently. People argue that a product 'must' be better because of the price. They assume that it must be made of higher quality steel or use better rubber or whatever gets them through the rationale it takes to convince themselves 'their brand' is better. Those people also tend to downplay cost as being 'worth it' in the long run. Data does not support their position, but they rarely can be convinced as they would have to admit being fooled by marketing.

 

[Gale Hawkins]

Sometimes I think everyone is a special snowflake.

 

[rScotty]

Here is the thing. Marketing strategies are in the aggregate, not on individual sales. No brand 'eats' the cost of anything. All expenses (like taxes) are paid by the customers, employees, or owners. The zero percent strategy allows me, as a excellent credit customer, let some other schmuck pay for a wee bit of my purchase. Not everyone gets zero %. So while 0% isn't 'free', it is often the best deal, all else being equal.

At the same time, it is a strategy that allows lenders to make more money (again, in the aggregate) because that is how risk portfolios work and how they are regulated by gubmint.

I agree that Kubota (and JD) have believed their own press clippings so long that they figure they deserve to price higher. They can do this because of a marketing psychology phenomenon wherein a certain subset of buyers assume higher prices equal higher quality.

This is not a new concept. Upton Sinclair wrote about it in The Jungle. In his example,iirc, there was literally no difference between the 'premium' sausage and the economy sausage. Just a label and the perception based on price that a product is better.

You see it here frequently. People argue that a product 'must' be better because of the price. They assume that it must be made of higher quality steel or use better rubber or whatever gets them through the rationale it takes to convince themselves 'their brand' is better. Those people also tend to downplay cost as being 'worth it' in the long run. Data does not support their position, but they rarely can be convinced as they would have to admit being fooled by marketing.

How about the brands that actually are better. Doesn't it cost more to make a better product?

 

[Torvy]

How about the brands that actually are better. Doesn't it cost more to make a better product?

Not necessarily. It sure helps high priced brands keep making money. As long as you and others believe it, they can sell for more.

 

[ovrszd]

Boy, no disrespect, but this comment really shows a lack of understanding farmers. They farm till they drop. I know a family who lifts their father up to the tractor/combine platform so he can still run them. Too old/weak to climb the ladder. When farmers "retire" they go help other farmers. It isn't a job, it is a lifestyle it is their everything.

They don't retire from it while they are still able bodied 95% of the time. They don't want to do anything else, they feel sorry for many of us who do.

That's how it is here. Several years ago I hired an elderly (mid 60s) farmer to do some dozer work for me. We were sitting in the shade eating lunch and I said "Leonard when are you going to retire?" He said "define retirement". I said "doing what you want to do every day". He said "I've been retired my whole life". When Leonard was 90 he still ran the combine. He's 97 now, still living in the farm house but can't run the machinery anymore.

 

[Torvy]

Apparently I really hit an unexpected nerve.

But it doesn't seem so. Apparently I am wrong on that. Just because that was my own view of success I had assumed it applied to others as well. Not so.

pondering....rScotty

I think for many of us, work was a necessary evil to get to some financial goal. Farming as a source of wealth (not all success is financial) is not typically a thing. Most of the money goes into land, equipment and livestock. Farmers may get rich on paper, but be short of cash. Few successful farmers came into it from the outside. Most were born into it and inherited the resources needed to get started (including the know-how). I think it would be rare to find someone who started farming from outside the industry and made enough money from farming to leave it at a young enough age to have a 'dream' career. (Note, I said 'from farming')

I worked in banking, not because I dreamed of it as a boy, but because I fell into it, was good at it and made a healthy living from it. More importantly, I met my wife in it and she has made more than I have. This financial success allowed me to teach. Like farming, it is a calling, not a career. It is considerably easier than farming, however. The end goal was always to have enough to retire early and live on the land in our dotage. For us 'farming' will give us wealth in our hearts, not in our accounts.

 

[jyoutz]

Not necessarily. It sure helps high priced brands keep making money. As long as you and others believe it, they can sell for more.

There are additional factors that determine if a product is “better” to a buyer than just manufacturing quality. For example, dealer network support and parts support. There are many colors of well built tractors, but only two where I live that have the dealer shop support and parts. It is worth it to me to pay the premium price to buy these products.

 

[Gale Hawkins]

How about the brands that actually are better. Doesn't it cost more to make a better product?

Do you know the Tesla and Ford stories?

 

[ovrszd]

Successful farmers are always "Asset Rich, Cash Poor".

With that said my very good friend, a very large farmer, can buy me out of his Petty Cash. But his assets are hundreds of times greater.

He owns two houses in Florida Keys. A mansion with a 3 boat "garage" on the lake at Branson. Condominiums in Florida. A massive ranch in Montana. His own private Jet. Buys and sells real estate assets constantly.

If you as a stranger asked him what he does for a living he would say "Farming". Every Spring he's involved in the planting. Every Fall he's involved in the harvesting.

 

[Fixastuff]

The farmers I know may like farming, but dang they complain about it alot

 

[Torvy]

There are additional factors that determine if a product is “better” to a buyer than just manufacturing quality. For example, dealer network support and parts support. There are many colors of well built tractors, but only two where I live that have the dealer shop support and parts. It is worth it to me to pay the premium price to buy these products.

Maybe that says more about where you live than the brand itself. That's the price you pay for natural beauty. You make a good point that location can alter our choices.

 

[ovrszd]

The farmers I know may like farming, but dang they complain about it alot

The farmers I know are Eternal Optimists.

 

[Torvy]

He buys and sells real estate assets constantly.

I would say he is in real estate and 'farms' as a hobby. Plenty of farmers who supplement with YouTube, or other side-hustles. That's why I say what do they make from farming alone.

 

[ovrszd]

I would say he is in real estate and 'farms' as a hobby. Plenty of farmers who supplement with YouTube, or other side-hustles. That's why I say what do they make from farming alone.

I know it's hard to know someone only from comments on a forum. Doug is not "in real estate" and he most certainly doesn't "farm as a hobby". To describe what I told you about him as a "side-hustle" is naive on your part. At their peak they planted 25,000 acres per year. This year they were down to 19,000 acres. Hobby......

 

[Torvy]

I know it's hard to know someone only from comments on a forum. Doug is not "in real estate" and he most certainly doesn't "farm as a hobby". To describe what I told you about him as a "side-hustle" is naive on your part. At their peak they planted 25,000 acres per year. This year they were down to 19,000 acres. Hobby......

There are big hobbies and small hobbies. You would have to know whether he was rich simply from farming and then took on RE as a hobby or something else.

Did he inherit a large farming enterprise? Did he leverage inherited wealth into more land? In my experience, real farmers don't have the time for travel and beach houses. I have family with very successful operations, but you would never know it. When they are away from the ranch, it is to haul something somewhere or for family events. They look like every other farmer trying to scratch out a living. For them, a side hustle is helping the neighbors with branding or harvesting crops around the area. They own thousands of acres of ranch land and thousands of head of cattle. They don't sell land, they buy it and put it into production.

The way you described it, your friend is there for planting and harvest. That reads absentee farmer to me. That means someone else is farming his land and he comes by to help out twice a year. Of course, I would need a lot more info to know anything for certain. Bill Gates and Kevin Costner probably think they are successful farmers, too.

 

[ovrszd]

There are big hobbies and small hobbies. You would have to know whether he was rich simply from farming and then took on RE as a hobby or something else.

Did he inherit a large farming enterprise? Did he leverage inherited wealth into more land? In my experience, real farmers don't have the time for travel and beach houses. I have family with very successful operations, but you would never know it. When they are away from the ranch, it is to haul something somewhere or for family events. They look like every other farmer trying to scratch out a living. For them, a side hustle is helping the neighbors with branding or harvesting crops around the area. They own thousands of acres of ranch land and thousands of head of cattle. They don't sell land, they buy it and put it into production.

The way you described it, your friend is there for planting and harvest. That reads absentee farmer to me. That means someone else is farming his land and he comes by to help out twice a year. Of course, I would need a lot more info to know anything for certain. Bill Gates and Kevin Costner probably think they are successful farmers, too.

Again, you are so naive. By your own description in the bold print above.

From your description, your family is several notches below Doug. Not in a bad way. Just in a small way. At some point the assets need to be diversified and invested where they can be protected. Doug is a Master at that. You might see a land transaction in the paper next week where he sold some land. And then you'll see a transaction where he bought some land. He does so based on profitability. He owns approximately 17,000 acres of tillable farm land. I have no idea how many thousands of acres of timber, pasture, hay land.

Your successful operation farming family members would very much enjoy visiting with him. And he with them. Neither would consider the other in a bad light. And certainly wouldn't consider him an absentee farmer.

Edit: Forgot to mention the derogatory "inherit a large farming operation" comment. No he did not. Joined the Marines out of High School, served for three years. Came home and started building his farming enterprise. His Dad often criticized Doug for fear that he was going to go broke. Doug bleeds farming.

 

[Fixastuff]

It's amazing what people "know" about another person they've never met!