A story about a contractor

[treaney]

A guy that I know reasonably well has just sold out of his contracting business - lock, stock and barrel! He is 55 years old. He sold to two 35 year olds. He ran a fleet of JD's - 6xxx and 7xxx - average age was less than 3 years. Great gear. Also had 2 x Hitachi diggers EX 150 and EX 200.

Health etc is not an issue. I believe it was the repayment costs of the fleet coupled to the diminishing returns in the contracting business set against the huge increases in labour and fuel costs that finally convinced him to get out.

Finally, just to give the story a Z twist - guess what he started out with - yes Zetor Crystal 12011's in the 1980's!

Tom

 

[croc2]

Hi Tom,

Intresting story that, Sounds like he was doing something like i am, however all my tractors are paid for at the time of purchace except for 2 masseys which are on contract hire to compare costs with one that i have bought. I am thinking about buying more equipment this way as it seems to be ideal as all of the costs except tyres are in the monthly cost which is ofcourse much better too keep ones eyes on costs.

Aside from the tractors the plant is mostly paid for apart from the last 3 machines i bought which again are on a contract hire to see the difference in costs. My biggest outlay every month is ofcourse Fuel , wages,Machinery costs followed by insurance costs which are way too high. I am lucky as well due to the fact 95% of my customers pay within 30 days keeps the cash flow healthy.

Alzet did i see your post correctly about a new possible 200hp tractor from zetor , well will have too get my issue of classic tractor soon then. The forterras are still doing very well, still nothing really broken apart from a few windows, one seat collapsed and one driver managed to rip a set of steps off. The brakes have been relined on all 3 in the past month so they have done really well. Paint quailty is still rubbing me up the wrong way even now as most of the paint on the front axles is nomore.

 

[treaney]

Hi William,

Yes he had a big setup. The last JD he "bought" - I say bought as I don't know the exact details of his financing arrangement - was a JD 7xxx 170HP to operate three mowers - one in front and two behind. The total cost of tractor and mowers was in the region of 150K I believe. That's a lot of money to finance in anyone's book....

Do you have to have public liability insurance?

Tom

 

[croc2]

Do you have to have public liability insurance
[/ -- End of Quote -- ]

Hi Tom,

Yes i do have to have public Liability insurance and it costs quite a sum per month. That jd sounded intresting, i was going to get into agri work this year but decided that the outlay for 2 mowers, balers and wrappers was too much for not alot of gain, i know it would have been paid for after 2 years or so but trouble is i would have had to buy aleast one more tractor as well as some flat bed trailers so it would have been some outlay. So i have decided to wait until maybe next year and have a look then.

I know having 9 tractors, 3 with loaders, 5 wheel diggers and one 16 ton slew and at least 13 trailers is some fleet, one that is also quite managble at the moment and also it means i can still do a days work whilst my ladys in the office do the day to day running and wages each week.

 

[crystalman]

Interesting.I think there are some contractors who have to have the latest kit even if it is way too big for them.A guy near me has just replaced his trailed forager with a second hand Class Jaguar self propelled model.All very impressive but he does not seem to be getting any extra work and it won't fit in half the gateways round here without scraping half the paint off it!

 

[markku]

This is more than usual in Finland too! Some farmers want latest fashion equipments even there is not real need for it.

By the way, same guys are biggest complainers because farming/contracting isnt good business nowdays

Might there be any connection?

Those self propelled storage harvestores are getting more common in here too. But our biggest problem is moving grass from fields to silos. Our average field size is about 2 to 3 hectares!!! And there can be many kilometers from field to silos!!! For many farm easiest way to make works running would be invest for mowing grass, not for huge storage harvestors ???

It is too common to see 170 hp Valtra pulling 10m^3 grass trailer 69)69) Much better would be Zetor 7341 and 30m^3 trailer Offcourse

 

[Renze]

Common sight here, is an MF 6270 or a Zetor 16245 or a New Holland TM 165 pulling a 20 ton, 40 m3 Joskin, Veenhuis or Schuitemaker silage trailer....

...Or a 7240 Magnum pulling a three axle 60m3 home built trailer... only used on very big fields or long travel distance..