Wild bidding wars erupt at used-tractor auctions across the U.S.

https://www.bloomberg.com/news/articles/2021-11-13/deere-strike-ignites-bidding-wars-for-used-tractors

by SQL2219 • 5 years ago

192 173 5 years ago

bloomberg.com

SQL22192• 5 years ago

Coupled with right to repair issues, farmers are really in a bad spot.

toomuchtodo2• 5 years ago

Farmers need a coop that designs and builds farm equipment to avoid legacy manufacturer rent seeking.

Edit: open source hardware design and fabrication should be a part of 4-H programs, lots of overlap with maker/hacker spaces imho

daniel-cussen2• 5 years ago

Buy tractors from Belarus. They are nearly completely analog. What few plastic parts there are haven't been minimized. And if it's anything like it used to be in the Soviet Union, you get instructions on how to make the replacement parts yourself in the manual.

pessimizer• 5 years ago

I'm pretty sure 4-H relies on corporate sponsors.

myself2482• 5 years ago

I got tapped by 4H to judge a computers/electronics design event a few years ago. My background is in hackerspaces and OSHW, and the overlap with what the kids were building was staggering.

It's been a while and I'm curious what they're up to lately.

tomc19852• 5 years ago

Would it be possible to source designs from expired patents?

ren_engineer• 5 years ago

problem is that many of the corporate farms are owned by hedge funds who are also invested in BigAg companies, so they don't really care about right to repair. Hedge funds are also jacking up land prices because they have access to near zero interest loans for land

shmageggy• 5 years ago

Got any links where we can read about this? Shit like this is the root of all evil

loonster• 5 years ago

Sounds very similar to McDonald's Ice Cream machines.

h2odragon2• 5 years ago

Old iron is better built, less "electronic", and far easier to understand the designs and fabricate parts yourself. As well as cheaper to purchase.

Folks I worked with in the 80s were using Michigan dirt moving equipment from the 60s [1], and a quick look shows there's still similar machines being traded [2].

The market for tractors is far bigger than specialized construction equipment, but all the same factors apply. The bigger units, say 75HP and up, counted as "construction equipment" for us, certainly. Today's farms are bigger and today's farmers have little need for smaller machines.

[1] https://www.constructionequipment.com/michigan-elevating-scr...

[2] https://www.machinerytrader.com/listings/for-sale/michigan/s...

universa1• 5 years ago

Hmm, early 90s "we" already had about 180hp... Nowadays more like 300 to 400 for a tractor, and more for caterpillar like stuff... With the electronics obviously being a double edged sword... You kinda need them to efficiently use those big machines...

The smaller stuff is still around, but from my experience mostly for "hobby" farmers in Germany :-)

jasode4• 5 years ago

Old iron is better built, less "electronic", and far easier to understand the designs and fabricate parts yourself. As well as cheaper to purchase.

I thought that big farms take advantage of newer tech on tractors using GPS RTK for sub-inch accuracy and increased productivity? Therefore, depending on the workload, the decades-old "cheaper" tractor can turn out to be more costly because the farm's yield isn't keeping up with competitors. It seems like a tradeoff between old & new.

julianlam• 5 years ago

I believe the argument is that these new tractors are not repairable by yourself, leading to expensive repair and / or replacement cost

ThemalSpan• 5 years ago

You can retrofit gps control systems onto older machines.

bryanrasmussen• 5 years ago

well that sounds like marketing, which sometimes marketing can be correct, and sometimes it can be a bunch of BS. I don't know which is the case here but my hunch would be that if it were correct then old iron wouldn't be worth more than new to the people who would be best suited to know if it were BS or not.

There at any rate seems to be a discrepancy between what is supposed to be the case, and what people who should know seem to believe is the case.

LgWoodenBadger• 5 years ago

From the heavy equipment operators I watch, a lot of them have an extreme dislike for DEF and the regen cycles that all modern diesels over 25hp (iirc) require.

dboreham• 5 years ago

Yes "emissions" engines have a reputation for unreliability and costly maintenance.

fy20• 5 years ago

In my (post-Soviet) country it's still quite common to see Kamaz construction equipment (actual construction, e.g. light-weight cranes) from the 80s and 90s being used.

It's not that new equipment is not affordable (if something needs a 100t Liebherr crane, it'll come), but all the emissions equipment on new vehicles is a lot more expensive to maintain, so it's simpler and cheaper to keep old vehicles running.

mrfusion• 5 years ago

We need an open source tractor. Who’s with me!

It doesn’t even have to be great. Just minimum viable product and let iterations improve it.

Maybe a billionaire would fund kicking this off?

rascul• 5 years ago

There was one on HN about a month ago.

https://news.ycombinator.com/item?id=28827785

carbocation• 5 years ago

Check out https://opensourceecology.dozuki.com/c/LifeTrac

JohnJamesRambo• 5 years ago

The old ones are about as open source as you can get haha.

I can see everything on my Mom and Dad’s old Massey Ferguson tractors and every single part is available online from a plethora of vendors since there really aren’t that many parts.

markdown2• 5 years ago

Except they don't make those any more, do they?

Maybe some of the low-end Mahindra models will do. No fancy electronics, ease to maintain, etc.

rzzzt• 5 years ago

Would three wheels be enough?

webmaven3• 5 years ago

Would three wheels be enough?

Potentially, but there are a number of issues to overcome, such as:

More weight on each wheel compresses the soil more. This is possibly alleviated by the 3rd wheel not being in line with the other two, or that might make the problem worse, I'm not sure.

Steering, handling, tipping. With a triangular wheel base, the tractor will seem more top heavy for any given size. This is less of a problem than it would be for eg. an SUV, but it is still a problem. Widening the footprint overcomes this but introduces transportation and parking problems, not to mention having to reconsider spacing of row crops etc. Overcoming that is possible by making the whole thing an articulated tripod that can adjust the wheelbase at need (and incidentally maneuver in any direction), but the flexibility gained comes at the cost of quite a bit more complexity that is unlikely to be worth it for farming equipment (construction equipment might be a different matter, but I wouldn't bet on it).

markvdb• 5 years ago

Have a look at the plans for USSR tractors. Those were fairly well-documented. An acquaintance of mine working at a kolchoz - a USSR collective farm - told me whenever new rolling equipment came in, they usually took it apart and rebuilt it from scratch.

The Belarus (MTZ) tractor factory [0] still produces a popular super maintainable model that hasn't changed much since the 1970's.

[0] https://en.wikipedia.org/wiki/Belarus_(tractor)

leeoniya• 5 years ago

reminds me of https://i.redd.it/469hjiwz3ga21.jpg

MeinBlutIstBlau• 5 years ago

Or how about just remove the computers from the tractor.

bunabhucan• 5 years ago

https://archive.ph/8ZKDl

michaelcampbell• 5 years ago

If I'm reading the graph right, this is about the same prices as 2008-2013?

So although the prices have been lower between then and now, it's suddenly a crisis when prices are what they were 7-12 years ago?

randomdata2• 5 years ago

They were writing the same story in 2008-2013. Commodity prices are back to 2008-2013 levels, so people are spending their money like they did back then. That's farming.

ilamont• 5 years ago

If right-to-repair and ease of maintenance are such huge issues for farmers, why doesn't some up-and-coming manufacturer fill this niche?

Osiris• 5 years ago

1. Capital requirements 2. Patents

dehrmann4• 5 years ago

If people are buying up used tractors, I'd be surprised they'd be that disappointed with 20-year-old (i.e., all patents have expired) tractor tech.

structural3• 5 years ago

They do! They make parts for old tractors (really, old tractor chassis once everything else has been replaced a few times).

As far as why doesn't a new tractor manufacturer start up, they have to compete with a few things: first, the market for old tractors and parts (if they are repairable basically forever and the amount of land used by agriculture isn't changing, this is not a growth market). Worse, it's much more difficult to design a small engine for sale that is both reliable and will pass current environmental regulations. This is a major barrier to entry that didn't exist decades ago.

So if you're a startup in the ag space, it makes eminently more sense to make small parts for someone else's platform, which is why you see companies doing things like deploying GPS, cameras, lidar, datalogging systems. There, the market opportunity is "all tractors could benefit from this", the competition is initially "other small companies", the exit strategy is "get purchased by a large manufacturer who would rather buy than develop the tech themselves", and the regulatory environment is much more friendly.

R0b0t13• 5 years ago

Does farm equipment need to pass environmental regulations? I didn't think it did. If it does I doubt there will ever be a startup in this area.

webmaven3• 5 years ago

Worse, it's much more difficult to design a small engine for sale that is both reliable and will pass current environmental regulations. This is a major barrier to entry that didn't exist decades ago.

Do all the major farm equipment manufacturers design and build their own engines?

bsder• 5 years ago

For the same reason that selling to musicians or teachers isn't a great idea, your clientele are poor.

dehrmann4• 5 years ago

I'd think some second-tier manufacturers would see these bidding wars as an opportunity to do just that.

dzdt• 5 years ago

There are two kinds of optimum strategies for farmers, and there has been a long term shift from one to the other.

The older strategy is for a farm to be no bigger than a single family can handle, and to be as self-sufficient as possible. Here equipment is run as close to breaking down as it can be without actually being broken down. A tractor would be used <30 days a year (planting, fertilizing, weeding, harvest) and sit idle otherwise. It doesn't make sense to pay for a super-expensive machine to sit idle. The optimum is lowest cost to purchase, lowest cost to repair, cheapest option that can get the job done. A farmer builds a collection of nearly-broken down machines over years to have backup options if one isn't working when needed.

The other optimum is to have the largest, most effective, most efficient machines and use them enough to justify it. This makes sense at the industrial farming scale or as a contracting business where the equipment is owned by someone who does contract jobs for many smaller farmers. For this case the tractor needs to be running and making money as many days a year as it can; any down time is money lost.

The shift over years has been that the second strategy produces more crops with lower expenses than the first, and is taking over to the extent it is almost impossible to run a small farm without going bankrupt.

structural3• 5 years ago

This is absolutely true. A related trend is that many family-owned farms are no longer operated by the family: they own the land and lease the farming rights to an industrial-scale operation. The difference in efficiency means that the large operator can pay almost as much for the lease as the individual farming family would realize in profit if they worked the land themselves and still have a viable business.

h2odragon2• 5 years ago

Well observed. My experiences include a lot of farms that operated with big yards of scrap iron; were always repairing / rebuilding something, and did contract construction work to keep the machines running when they weren't using them for their own concerns.

There's very few operations running that way anymore, the "odd construction contract" market for them dried up before and faster than the farming side of those operations. USDA Soil Conservation flood control projects used to be a large source of work there.

yalogin• 5 years ago

In the US, isn't this the case for a long time now? I thought the consolidation towards bigger and bigger farms is the trend for a few decades now.

mistrial9• 5 years ago

yes, quite a bit of consolidation after the 1980s in the farming sector. culture reference: Farm Aid

https://en.wikipedia.org/wiki/Farm_Aid

akudha2• 5 years ago

Isn’t this generally true in other industries too? Small cafes can’t compete with Starbucks, there are no mom and pop pharmacies, small grocery stores can’t compete with huge/ugly chains…

At this rate, the entire planet will be ruled by a few dozen mega corporations. This sucks, but I don’t know what can be done to mitigate the situation.

Beaver117• 5 years ago

Well, shoplifting and other petty theft has been increasing

chillingeffect• 5 years ago

(Most of) us don't have to work for them and (most of) us don't have to buy from them. If we mindfully shop looking at the big picture, we can support smaller operations.

otikik• 5 years ago

I don’t know what can be done to mitigate the situation.

Something about the means of production, perhaps.

perl4ever4• 5 years ago

Small cafes can’t compete with Starbucks

Why do you say this? I don't randomly change pharmacies for my prescriptions, so I can't think of a "mom and pop pharmacy" off hand, but non-Starbucks coffee shops are everywhere. This has been my experience everywhere I've been in eastern states in the US from Virginia to New York.

My perception is that Starbucks is primarily a place to get milkshakes, and their coffee is undrinkable, and their food is worse.

Most other coffee shops do much better in those two categories. Some are also chains, but many aren't.

tech_tuna• 5 years ago

No worries, according to Bezos, most of us will be living off-Earth soon anyway.

theptip4• 5 years ago

The shift over years has been that the second strategy produces more crops with lower expenses

I read an interesting book recently (Seeing like a State) that makes the claim that large-scale monocrop industrial farming is only actually “optimal” if you don’t price in the heavy subsidy, and if you ignore the non-revenue contributions of small-hold agriculture (e.g. the land might provide fuel, crafting materials, and otherwise support the farmers in a way that doesn’t show up on the balance sheet). Not to mention that the larger farms tend to be extractive, in that they are using up water from the water table and nutrients from the soil, and so they will eventually degrade the land to the point where it cannot be productive any more.

I did some digging and the farm subsidies in the US are truly eye-watering, and particularly notable is that the biggest 10% of farms take 90% of the subsidy, so we are not even subsidizing “traditional working farmers” or anything like that, just shipping hundreds of billions to huge ag corps.

I wouldn’t claim to be an expert nor to be certain about those economic claims though, and would be interested in others’ thoughts here, particularly other books you found useful on the subject.

toyg• 5 years ago

particularly notable is that the biggest 10% of farms take 90% of the subsidy

This is the real problem.

I wish somebody would come up with a simple mechanism to stop all subsidies to companies over a certain size. Yes, it will be gamed, but it's still better than the outright crony-capitalism we have today.

jml7c5• 5 years ago

particularly notable is that the biggest 10% of farms take 90% of the subsidy

How much crop production do the biggest 10% of farms represent?

shalmanese2• 5 years ago

I did some digging and the farm subsidies in the US are truly eye-watering, and particularly notable is that the biggest 10% of farms take 90% of the subsidy

Well, yeah. The 90th percentile farm makes $7665 in farm income per year [1] so how much subsidies could they possibly absorb?

"Farms" in the US are overwhelmingly used as a tax avoidance strategy. Only a numerical minority of farms are actually designed to grow food.

[1] https://aei.ag/2019/02/25/what-is-median-farm-income/

fshbbdssbbgdd• 5 years ago

If farms got charged for their water use (a high enough price to reduce usage and prevent drought), I wonder if the small farms would still do a better job on that front, or would the more industrial farms do their optimizing thing and become more efficient? I suppose you could also price the impact on soil quality, but that sounds harder to administer.

dools• 5 years ago

It’s almost like there’s an entire branch of government dominated by a minority of land holders

im3w1l3• 5 years ago

Why can't the family farmers share a pool of highly efficient tractors?

AlotOfReading• 5 years ago

Excepting unusual conditions, most nearby farmers needing the same equipment will need it at similar times. You can get around this by transporting machinery long distances as migrant workers do to hit multiple harvests in various parts of the country, but that gets expensive.

foepys• 5 years ago

In Germany you can rent equipment and operators for this equipment. A lot of farmers do it for crops they don't usually harvest but are required to to keep the land fertile or to collect subsidies.

The problem with this model is that, as the sibling comment already pointed out, harvest is done typically within one or two weeks or even in two days, depending on the weather. Harvesting too late can make the crop go bad. So renting the equipment and getting it to the field can be a hassle. It's still being done a lot but it's not risk free.

randomdata2• 5 years ago

It's more economically efficient for used equipment to stay in use.

lmm• 5 years ago

That sounds much the same as the "contracting business where the equipment is owned by someone who does contract jobs for many smaller farmers" case.

mschuster912• 5 years ago

The shift over years has been that the second strategy produces more crops with lower expenses than the first, and is taking over to the extent it is almost impossible to run a small farm without going bankrupt.

There is value in small-scale farming. If there is one thing urban hipsters love to pay for, it's artisanal, high quality organic food. There are farms where you can see pictures and datasheets of all the animals living there and you can pre-order certain cuts of the specific animal once it is slaughtered and processed.

foxhop• 5 years ago

It's not impossible, you are thinking from the wrong paradigm. The industry is already shifting if you pay attention to the proper news sources. The chemical agriculture war on pests and nature is coming to an end. These chemicals are making us sick, these monoculture are collapsing the ecosystem globally.

The good news is nature abhors a vacuum and will heal if we let it. The wu Wei. Small farms will rise, food is just too important for the economy and with rapid inflation there is no way around it. We are all going to have to become farmers or know our farmers.

Ref: https://m.youtube.com/channel/UC1eySW_9TiI5wnvTnIIw2Nw

cmroanirgo• 5 years ago

I live on my family farm. We have a 50yr old tractor and your basic premise seems correct. All of my neighbors follow the same route.

I would add that small farmers are typically not mono culture. We used to have various fruit varieties. One neighbor is mixed veggies, another cattle and flowers.

Our farm has been forced out of fruit because of corporate mono farms who inevitably cause gluts in the market due to over supply. In my local experience, corporate farms are typically 5-10 bigger as a minimum than their surrounding neighbors.

When a small farmer loses any percentage income, he must quickly change income stream. Hence, our fruit trees are gone, and we're now raising sheep, and are forced to be double income. Our tractor & other super reliable (but very clunky) machines remain.

oopsyDoodl• 5 years ago

I think it’s great.

It’s the story of humanity moving on from “I am my own industrial island” to inclusive effort at scale to automate away and normalize often dangerous logistical work (I am 41 and have limbless, digit less peers who had to work on family farms as teens.)

Family farms are, to me, simply a legacy social and technical effort.

The problem is old politics refusing to take reality seriously. Americans who carry on about their legacy of revolution, moving history forward, disruption!, exporting that mentality to the world, are all sad their lives are disrupted by others wanting the same agency.

Moral relativism worked for Americans while we bombed the world, impeding other nations progress, but they caught up anyway.

“There’s a warning sign on the road ahead; a lot of people saying we’d be better off dead. Don’t feel like Satan; but I am to them; so I try and forget it any way I can.”

If you didn’t sign a contract to be a family farmer for life, oh well. America.

smackeyacky• 5 years ago

Hey, sheep!

If it would be OK can you try contacting me directly through my profile? I'd like to find somebody in the US who is dealing with sheep and what they are doing with them. I have a product we would like to export to the US but I am really struggling to get a handle on the market there, it's very different to Australia/NZ etc.

nanomonkey• 5 years ago

There is a third option, often called "Market Gardener", where a tractor is not used because it is a waste of space and resources. Tractors require a lot of extra turn around space, and area for the wheels to travel that can be utilized for planting. Instead rows are built at 3 ft wide and perhaps 60 ft long to utilize human scale planting and weeding techniques. In this case the soil is not tilled, but instead allowed to build up. Covers are used to suppress weeds when the row is not in use. Rows are more easily rotated with cover crops or nitrogen fixating plants to improve the soil nutrients. These are of course smaller family farms 1-10 acres.

shawn-butler2• 5 years ago

Large-scale family farms and industrial nonfamily farms account for only 4.8% of farms, but 57.4% of production (in $). Small-scale family farms represent nearly 90% of U.S. farms, but only 21.5% of production.

Source is USDA (2020) America’s Diverse Family Farms.

dehrmann4• 5 years ago

The older strategy is for a farm to be no bigger than a single family can handle

The problem with this is it works because it's socially acceptable unpaid child labor. I do think that there's value to the work ethic it can build, but I also worry about overwork, how it sacrifices education, and how it encourages larger families where all the kids end up being disadvantaged as adults.

rgrieselhuber• 5 years ago

Decentralization vs Centralization

lettergram• 5 years ago

The shift over years has been that the second strategy produces more crops with lower expenses than the first, and is taking over to the extent it is almost impossible to run a small farm without going bankrupt.

While true, you can lease the land making a decent income without effort. Which is the best case scenario as many older farmers retire and leave the land to family.

On the other hand, if people still are looking to make a living, it's more focused on livestock such as cattle, chickens, pigs, etc often niche animals.

I know several people who effectively support Tyson: https://www.tysonfoods.com/who-we-are/our-partners/farmers/c...

rapnie• 5 years ago

The shift over years has been that the second strategy produces more crops with lower expenses than the first, and is taking over to the extent it is almost impossible to run a small farm without going bankrupt.

In the Netherlands there's renewed attention to stimulate small-scale farming and agriculture for various reasons.

For many years large supermarkets have been increasing pressure on the entire supply chain to produce as cheap as possible. It has its effect on all products, where more processed foods gradually replace 'genuine' produce. The larger margins are at the supermarket top of the chain, while farmers are the ones getting squeezed the most. To the extent that they are almost forced to scale up, but even then may find it hard to earn a decent living.

Now Netherlands farm industry is producing an insane amount of meat and vegetables. A tiny country and one of the larger exporters in the world. All this has had very detrimental effects on the environment. Our 'Green Heart' (the region circled by Dutch big cities) is basically a wasteland with little insects or birds, soil compaction. Only fertilizer and pesticides keep it all going. And we have a nitrate problem, caused by both farming and traffic, that is threatening the sparse natural reserves that are patched between argicultural lands.

All this is entirely unsustainable. It is also dangerous. A new pandemic may well find its source in the intensive livestock sector with its mega-stables.

As a result there's now a lot of political attention to doing things differently, scaling down farms, re-introducing old farming practices and experimenting with new ones. Small-scale farming is beginning to look more attractive again, and there's a growing consumer-base ready to pay a somewhat higher price for that as well.

sershe• 5 years ago

Interesting; I remember reading something similar on ACOUP about plow teams/etc. in the ancient world. According to ACOUP having access to plow teams and other expensive stuff due to trade/specialization moves the whole system into a better, richer equilibrium. Would the same apply to tractors? Not for individual farmers but for farming "system" as a whole?

giantg2• 5 years ago

There will be a lot of demand for less electronic cars too. Once the mandatory intoxication and automatic braking takes effect in 2026, demand for older cars will go up.

errcorrectcode• 5 years ago

Belarus has problems right now, but US farmers on the side of R2R have been buying old John Deere tractors as in the article and modern ones from more repairable vendors like Minsk Tractor Works.

gremloni• 5 years ago

Mahindra tractors from India are used all over the Midwest. I can see why- they’re solid but can still be fixed by a farmer.

tomc19852• 5 years ago

Interesting... I remember encountering Mahindra vehicles in South America and wondered why I they didn't seem to be in the 'States at all

HeyLaughingBoy• 5 years ago

I've never seen one in the flesh but they advertise on RFDTV (https://www.rfdtv.com/) all the time.

SQL22192• 5 years ago

Lamborghini still makes tractors https://www.lamborghini-tractors.com/it-it/

monksy• 5 years ago

They won't fit in your bar like a massy will.

SyzygistSix• 5 years ago

Way cooler to drive to school on tractor day though.

markdown2• 5 years ago

Anyone fascinated by this should subscribe to the "Just a few acres farm" channel on youtube.

https://www.youtube.com/channel/UCkOTo20XS1LL95g2p6CcE3A?vie...

anonu• 5 years ago

Reminds me of NPR Planet Money's recent 2016 rerun on the subject: https://www.npr.org/2021/11/12/1055421103/auction-fever-clas...

Wild bidding wars erupt at used-tractor auctions across the U.S.

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