The Life of a Custom Mowing contractor

[EddieWalker]

The Discbine style of mowers can handle quite high speeds they are often advertised as being capable of mowing and conditioning hay at 10 mph. The larger frame 4wd tractors with good sized tires can handle 6 to 8 mph in most hay fields and in a real smooth one 10 mph is doable but the same hp tractor in a 2wd model with the much smaller front tires is often too rough. Between the tall tires and the air suspension seats the ride can be quite comfortable , the head lands are often rougher and merit slowing down for.
Fields that I have mowed at 6-8 mph in an IH Magnum, I can only do 4-6 mph with a tedder or rake in a smaller tractor such as my Branson 8050.
Then a couple of places around here have the Krone Big M mowers with 30+ ft of swath width and 400-500+ hp, these things are flying down fields at 10+ mph. And a price tag of half a million dollars.
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This is where I struggle the most when trying to figure out farming. How much hay do you have to sell to break even when a tractor costs $500,000? Then their is the cost of the other tractor to bale it and the cost of the baler, then the cost of the truck and trailer to haul the hay.

It all adds up to a massive monthly payment that I can't figure out how they make that payment by selling hay.

 

[LouNY]

Spread over a lot of years

 

[EddieWalker]

How many years? I don't know how they do things for big tractors. My experience has been that tractors are financed just like cars are. 5 to 8 years, with 5 being the standard. I did my Massey over 7 years with zero percent interest, and it's $664 a month for $55,000.

Is it wrong to think that a half million dollar tractor over 7 years with zero percent interest would be over $6,000 a month?

 

[LouNY]

Often 3 to 5 years, some even have only one payment a year, some will do bi-annual, and some monthly. Most have a very substantial down. Some large places use leases to control costs, but yes they are large payments.

 

[Coffee drinker]

A decent used tractor that can run a baler shouldn't cost $500,000.

 

[LouNY]

A decent used tractor that can run a baler shouldn't cost $500,000.

Most used ones don't, that said someone has to buy the new ones to have used ones. Also the tractor to run a baler depends greatly on the baler and or accumulator being used. To pull a small square baler with no bale wagon or kicker wagon doesn't take that much, heck even on hilly ground a good 60 hp would be fine. Add a kicker wagon to the train on hills a 100 hp is safer. Go to a big round baler doing silage bales 100-125 Hp on hilly ground works well. Go with the big square baler and maybe an accumulator a 180-250 is nice to have in front of it.
New 290 Hp on the PTO 340 on the engine;
just over half a million dollars,
it can be yours for a mere $632,183.00

or used, 2 year old with 770 hours on her, for just $498,000.00

going on 10 years old for only $250,000.00

Or a 2008 model for just $150,000.00 with only 4060 hours on her,

low hour 1995 model CIH 7240 with only 3400 hours for only $94900.00

Or something like this, which is what we have on the farm for most work, only 170 Hp with almost 7700 hours and asking $55,000.00 for a thirty year tractor.

 

[LouNY]

Hay Dude sorry about posting so much on your thread.

Lou

 

[BackRoad]

Mr. Lou, can one reasonably expect to get 30 years out of a new large frame, 150+ hp tractor being sold today?

 

[LouNY]

Mr. Lou, can one reasonably expect to get 30 years out of a new large frame, 150+ hp tractor being sold today?

It might but with all the integrated electronics I'd be hesitant to say yes.

 

[Hay Dude]

This is where I struggle the most when trying to figure out farming. How much hay do you have to sell to break even when a tractor costs $500,000?

Farmers running 500K tractors don’t generally do only hay. They’re doing hay, corn and beans on a pretty massive scale. Hay-only farmers generally run older lower value equipment.
I do ~1,000 acres now and my most expensive pieces are a $75,000 tractor and a $45-55,000 large square baler.

There’s maybe a little over 100K in these 2 pieces.


And those prices are about 1/6th the price of new.
I shop for bargains and am not afraid of something that looks run down if it runs good.

Then their is the cost of the other tractor to bale it and the cost of the baler, then the cost of the truck and trailer to haul the hay.

ALL my equipment added together is worth under 500K, some is owned outright. Some is partially/lightly financed.

It all adds up to a massive monthly payment that I can't figure out how they make that payment by selling hay.

It depends on how much hay you make. If you make $150,000/yr in sales and your payments on all equipment are $35,000, then you have $115,000 left over for fuel, repairs, insurance and yourself. Then you have off-farm income. That may net far more than farm income.

It either pencils out or it doesn’t. Just takes basic accounting skillz.

But I don’t know anyone doing only hay with any 500K tractors unless they have a very large operation.