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The numbers are nuts. But true. Tractors do depreciate at $85-100/hour. Maybe more. Makes one wonder..how would the modern tech beauteous tractor bots deprecia

The numbers are nuts. But true. Tractors do depreciate at $85-100/hour. Maybe more. Makes one wonder..how would the modern tech beauteous tractor bots depreciate ...any VCs or paper number crunchers amongst us? I can’t wrap these numbers around my head. Crop subsidies are messing up with valuations and tech progress. It is the root rot of all tech innovations pronounced DOA.

nobodyandproud 6y ago
I had the same thought: The tractor industry seems ripe for disruption.
- Loughla 6y ago
  The problem with an industry like tractors is, from my humble and limited experience as a farmer who hated it is that it's less about the industry and more about a mismatch between needs and reality. Farmers need machines that can operate at as close to zero ongoing cost as possible. They need automation and simplicity from the machine as well as any software. They need an assurance that, if something goes wrong they can either fix it themselves at that moment with common and standard tools, or that someone can come fix it for them within the hour, for a very low cost. The problem with fancy modern tractors aren't that they are a negative value, or that they aren't extremely handy. It's that they are unbelievably expensive, because they are geared toward huge production, extremely efficient corporate "family" farms. The kind of people who use old, out of date machinery because it's cheaper and easier to fix are a) dying out, and b) not a huge market in the US. Maybe I'm way off base, but the 'need for disruption' in farming has always struck me as naive at best, and extremely egotistical at worst. That being said, as someone who actually did farm for 20+ years before quitting that for a cushy office job, I would love for the barrier to entry to be lower. I would love to hobby farm, but it's so expensive to do anything nowadays that it's impractical. But that, again, is not much of a market.
  - jelliclesfarm 6y ago
    I hear you..every word you said.. Should we move to a model that shares equipment? Or create farming-as-a-service? Of course this might mean that farms have to be contiguous acres. But less risk and lower capital sunk is a good deal. That is the kind of disruption needed.
    - Loughla 6y ago
      So there is currently an informal structure for that across the US. I know where and who has a combine that I can borrow or pay just a little bit to harvest my crops. I know who can cover feeding for me if I'm out of town. Also, that is what we used to do across the country. Co-ops and informal neighborly agreements to trade labor used to be the standard. We've gotten away from that with the development of mega-farms. Not sure what that's worth, but there it is.
    - bingerman 6y ago
      Offtopic but what we really need is a model where producing maximum amount of calories with minimum cost is heavily discouraged.
    - chrissnell 6y ago
      Start following some row crop farmers on Twitter, especially the guys that post tractor porn. This stuff will blow your mind. They can plant dozens of rows of corn in a single pass. The software and tech that drives a big John Deere planter is just unbelievable. Also, unbelievably expensive.
      - jelliclesfarm 6y ago
        Heh..10 acres an hour average. With a 12 row. Planting days are usually 12 hours/day.
  - nobodyandproud 6y ago
    Which gets to the question: Why is it so expensive? Why can’t commodity parts and opensource software be used? Making the bar to entry even higher will make only mega farms viable, with a winner take-all result.
    - JamisonM 6y ago
      This stuff is expensive because it is expensive to make. Versatile can deliver the same HP for around 25-30% off the the sticker price of a CNH or Deere, but that's really the bottom of the barrel in terms of margins and using commodity parts. A lot of this stuff is just that expensive to make! The bar to entry is actually the lowest it has been in a while in terms of equipment, land is the real barrier to entry if you want to make a living as a grain farmer.
h2odragon 6y ago
Cost per hour and Cost per operating hour. Those two figures show the hard number a machine needs to earn for a business. I used to sell people software to help figure and track that; which meant i helped several people initialize a system and see those numbers laid out for the first time. It was frequently traumatic to their assumptions. You can lard up the presumed maintenance budget for old iron and it still beats new all up and down.
hadlock 6y ago
$100/hour is for engine time, to which you can roughly estimate maintenance for other parts of the device. You can expect to get 10,000 hours on a diesel engine before it needs at least a partial rebuild. The article talks about getting 40,000 hours out of a tractor, so that would probably be partial rebuilds at 10,000 and 30,000 hours, and a full rebuild at 20,000 hours. Included in that $100/hr is fuel and insurance and replacement parts etc. for a device designed to haul around 20 tons of equipment offroad as part of it's daily tasks. Compare that to the federal milage rate for passenger cars that are designed to move around 0.25 tons of equipment at $0.58/hr, you come up with ~$50/hr (@ 20 tons) for something designed to drive on paved interstate highways. It's not especially unreasonable.

nobodyandproud 6y ago

I had the same thought: The tractor industry seems ripe for disruption.

Loughla 6y ago
The problem with an industry like tractors is, from my humble and limited experience as a farmer who hated it is that it's less about the industry and more about a mismatch between needs and reality. Farmers need machines that can operate at as close to zero ongoing cost as possible. They need automation and simplicity from the machine as well as any software. They need an assurance that, if something goes wrong they can either fix it themselves at that moment with common and standard tools, or that someone can come fix it for them within the hour, for a very low cost. The problem with fancy modern tractors aren't that they are a negative value, or that they aren't extremely handy. It's that they are unbelievably expensive, because they are geared toward huge production, extremely efficient corporate "family" farms. The kind of people who use old, out of date machinery because it's cheaper and easier to fix are a) dying out, and b) not a huge market in the US. Maybe I'm way off base, but the 'need for disruption' in farming has always struck me as naive at best, and extremely egotistical at worst. That being said, as someone who actually did farm for 20+ years before quitting that for a cushy office job, I would love for the barrier to entry to be lower. I would love to hobby farm, but it's so expensive to do anything nowadays that it's impractical. But that, again, is not much of a market.
- jelliclesfarm 6y ago
  I hear you..every word you said.. Should we move to a model that shares equipment? Or create farming-as-a-service? Of course this might mean that farms have to be contiguous acres. But less risk and lower capital sunk is a good deal. That is the kind of disruption needed.
  - Loughla 6y ago
    So there is currently an informal structure for that across the US. I know where and who has a combine that I can borrow or pay just a little bit to harvest my crops. I know who can cover feeding for me if I'm out of town. Also, that is what we used to do across the country. Co-ops and informal neighborly agreements to trade labor used to be the standard. We've gotten away from that with the development of mega-farms. Not sure what that's worth, but there it is.
  - bingerman 6y ago
    Offtopic but what we really need is a model where producing maximum amount of calories with minimum cost is heavily discouraged.
  - chrissnell 6y ago
    Start following some row crop farmers on Twitter, especially the guys that post tractor porn. This stuff will blow your mind. They can plant dozens of rows of corn in a single pass. The software and tech that drives a big John Deere planter is just unbelievable. Also, unbelievably expensive.
    - jelliclesfarm 6y ago
      Heh..10 acres an hour average. With a 12 row. Planting days are usually 12 hours/day.
- nobodyandproud 6y ago
  Which gets to the question: Why is it so expensive? Why can’t commodity parts and opensource software be used? Making the bar to entry even higher will make only mega farms viable, with a winner take-all result.
  - JamisonM 6y ago
    This stuff is expensive because it is expensive to make. Versatile can deliver the same HP for around 25-30% off the the sticker price of a CNH or Deere, but that's really the bottom of the barrel in terms of margins and using commodity parts. A lot of this stuff is just that expensive to make! The bar to entry is actually the lowest it has been in a while in terms of equipment, land is the real barrier to entry if you want to make a living as a grain farmer.

h2odragon 6y ago

Cost per hour and Cost per operating hour. Those two figures show the hard number a machine needs to earn for a business. I used to sell people software to help figure and track that; which meant i helped several people initialize a system and see those numbers laid out for the first time. It was frequently traumatic to their assumptions. You can lard up the presumed maintenance budget for old iron and it still beats new all up and down.

hadlock 6y ago

$100/hour is for engine time, to which you can roughly estimate maintenance for other parts of the device. You can expect to get 10,000 hours on a diesel engine before it needs at least a partial rebuild. The article talks about getting 40,000 hours out of a tractor, so that would probably be partial rebuilds at 10,000 and 30,000 hours, and a full rebuild at 20,000 hours. Included in that $100/hr is fuel and insurance and replacement parts etc. for a device designed to haul around 20 tons of equipment offroad as part of it's daily tasks. Compare that to the federal milage rate for passenger cars that are designed to move around 0.25 tons of equipment at $0.58/hr, you come up with ~$50/hr (@ 20 tons) for something designed to drive on paved interstate highways. It's not especially unreasonable.