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JD does the hard stuff that others aren't as willing to invest in: a large service network with spare parts and spare machines. Harvest time can be make-or-bre

JD does the hard stuff that others aren't as willing to invest in: a large service network with spare parts and spare machines. Harvest time can be make-or-break for farmers. Stuff you don't expect like a large storm at the end of summer can blow over corn stalks. That makes it a lot slower to run the combine at harvest time. If early fall storms are forecast you might literally need to get everyone available out in the field to harvest the corn in the next 3-4 days or you can expect the value of your crop to drop dramatically - everything will be wet and it's no longer warm or sunny enough for it to dry out. The field turns to mud and the grain elevator ain't gonna pay full price for water-soaked corn. Everyone else is in the same boat so every available truck+driver is booked. Every mechanic is already 5 tractors backlogged from all the other farmers with emergencies. Then your harvester/combine dies. If you're with JD... they have a crews of engineers/mechanics and semi trailers loaded with parts driving around the country following the harvest. They will get you going again in a day or two, not 1-4 weeks later when some other dealer can fit you in or when the spare part you need arrives. From JD's perspective that service network and parts stock costs a lot of money to maintain so it is available during harvest. They don't want customers going the cheap aftermarket route 11 months of the year because one month of sales can't sustain harvest support teams long-term. It's similar to peak electric generation capacity. Generator plants aren't economic if they only run 5% of the year at regular prices. In this analogy peak pricing has a limit: it would very quickly make harvesting the crop unprofitable. FWIW I do think it's mostly a money grab by JD. Same reason Chamberlain closed their garage door opener API and has locked down myIQ: they want to force platforms, automakers, etc to pay for access to "their" customers and turn garage door openers into MRR. It's basically free money that you couldn't even imagine prior to the internet.

timc3 3y ago
Growing up on a farm 30 years ago - we wouldn't have to wait a day or two. You would start fixing the problem straight away, worse case being someone would have to drive to get a part and then you would install it. And many parts you could fix yourself with a well stocked workshop (think welding gear, cutting equipment, stuff to work on hydraulics, lots of random crap, spare bits of metal and a large space or in the field). Then came the computers...
- tomwheeler 3y ago
  That's exactly right. My grandfather owned a fairly large farm and had a workshop so he and the workers could service the equipment on site. Some of the tractors lasted 30 years or more because they were so well maintained. Even in his 70s, the joints he welded when repairing them were far better than the originals.
  - bluGill 3y ago
    At what cost. I'll bet your grandfather never tracked the cost of his workshop and time. Note too that the scenario is all hands on deck harvesting - skipping one day of harvest can (if there is worst case storm) cost your more in profit than a brand new combine. If you have to pay someone labor the cost of keeping old machines running adds up a lot farther than most people realize. I know one construction company owner who in the 1990s worked it all out - all that 30 year old equipment that he was keeping running. Then he want to a dealer and signed a lease for $25,000/month, as he left the negotiations, reeling from the price tag, his account turned to him and said "you just saved yourself $30,000/month".
    - gen220 3y ago
      When you outsource support, that carries costs that are difficult to measure and not carried in the lease. Your "supply chain of business" just became less robust. If you're in a business where a couple of days in lead time for repair can make or break a harvest, (1) having a repairs workshop (2) investing in tools you can reliably repair yourself is essentially an insurance premium that protects your harvest by placing its success squarely within the hands of the part most interested in success. This "insurance" aspect is something that accountants reliably fail to account for, because it doesn't show up in any business ledger. But this way of thinking generally wins because it increases fiscal efficiency, while the side-effect of making systems more fragile is consistently written-off.
      - bluGill 3y ago
        What farmers do is instead have a relationship with a mechanic (normally dealer) who has spares. If they can't fix it in a couple hours they bring a loaner you can use until they get it fixed. Simple problems can be done in an hour by your plan, but anything complex you are in the shop instead of the field for hours.
whatshisface 3y ago
>They don't want customers going the cheap aftermarket route 11 months of the year because one month of sales can't sustain harvest support teams long-term. It can if you charge more for it...
- Loughla 3y ago
  So they already do that. There is a very distinct price difference between off season repairs and emergency field repairs. Both on labor and parts.
m463 3y ago
> They will get you going again in a day or two what if they prevent you from doing it yourself in a minute or two?
donmcronald 3y ago
> In this analogy peak pricing has a limit: it would very quickly make harvesting the crop unprofitable. What? Equalizing or normalizing the costs over the entire year by price gouging on repairs during non-peak months doesn't suddenly make the total cost any different. Farmer's are absolutely bearing the cost having a service network that can satisfy peak demand no matter what kind of pricing scheme is backing it. If a low priority repair costs $5 in the off season, but $55 for the same thing during the peak, farmers aren't better off getting charged $30 for both. It's still $60 at the end of the year. If anything, that penalizes the farmer that's doing preventative maintenance in the off-season and benefits the farmer that leaves their equipment to break down at critical times. The responsible person is subsidizing the irresponsible person in that case.
JohnFen 3y ago
Then surely, instead of trying to poison the legal landscape around these issues for everybody, they could cover their business needs by no longer selling that equipment, but leasing it. Then they could make the terms of the lease be amenable to the economics of their business without working to make things worse for everybody else.
robbiep 3y ago
We’ve got 2 S680s my uncle has a couple of X10s and a whole shed of s7 series and our whole district is green. There were a lot of green machines sitting on the sidelines this harvest waiting for technicians to get their shit together to reset this or service that. Back in the era of the 95XX or even 8820s you could do it all yourself. Now a fucking light comes on and you need to call someone to drive over an hour from our nearest dealership to plug in his gizmo to say this needs to happen. Not to mention they totally understock on prices. Harvesting is rapidly becoming unprofitable. Just because an X10 can strip 50 tons an hour doesn’t mean it’s worthwhile at $1m a machine. That’s why we keep a CTS2 on the sidelines. Mightn’t strip as fast but at least it’s reliable and we can maintain it without getting a site visit
autoexec 3y ago
> If you're with JD... they have a crews of engineers/mechanics and semi trailers loaded with parts driving around the country following the harvest. They will get you going again in a day or two, not 1-4 weeks later when some other dealer can fit you in or when the spare part you need arrives. that's not the story farmers are telling. Farmers have been complaining about not being able to get parts (https://talk.newagtalk.com/forums/thread-view.asp?tid=1044504&DisplayType=nested https://talk.newagtalk.com/forums/thread-view.asp?tid=104450...) and saying that because they're forced to get repairs from John Deere that single source for service gets overwhelmed and they can end up waiting for weeks on technicians while watching their crops rot away. (https://www.ifixit.com/News/62788/john-deere-has-been-violating-the-clean-air-act-by-restricting-repair https://www.ifixit.com/News/62788/john-deere-has-been-violat...)
- xenadu02 3y ago
  I'm not saying I agree with JD, just explaining their reasoning.

timc3 3y ago

Growing up on a farm 30 years ago - we wouldn't have to wait a day or two. You would start fixing the problem straight away, worse case being someone would have to drive to get a part and then you would install it. And many parts you could fix yourself with a well stocked workshop (think welding gear, cutting equipment, stuff to work on hydraulics, lots of random crap, spare bits of metal and a large space or in the field). Then came the computers...

tomwheeler 3y ago
That's exactly right. My grandfather owned a fairly large farm and had a workshop so he and the workers could service the equipment on site. Some of the tractors lasted 30 years or more because they were so well maintained. Even in his 70s, the joints he welded when repairing them were far better than the originals.
- bluGill 3y ago
  At what cost. I'll bet your grandfather never tracked the cost of his workshop and time. Note too that the scenario is all hands on deck harvesting - skipping one day of harvest can (if there is worst case storm) cost your more in profit than a brand new combine. If you have to pay someone labor the cost of keeping old machines running adds up a lot farther than most people realize. I know one construction company owner who in the 1990s worked it all out - all that 30 year old equipment that he was keeping running. Then he want to a dealer and signed a lease for $25,000/month, as he left the negotiations, reeling from the price tag, his account turned to him and said "you just saved yourself $30,000/month".
  - gen220 3y ago
    When you outsource support, that carries costs that are difficult to measure and not carried in the lease. Your "supply chain of business" just became less robust. If you're in a business where a couple of days in lead time for repair can make or break a harvest, (1) having a repairs workshop (2) investing in tools you can reliably repair yourself is essentially an insurance premium that protects your harvest by placing its success squarely within the hands of the part most interested in success. This "insurance" aspect is something that accountants reliably fail to account for, because it doesn't show up in any business ledger. But this way of thinking generally wins because it increases fiscal efficiency, while the side-effect of making systems more fragile is consistently written-off.
    - bluGill 3y ago
      What farmers do is instead have a relationship with a mechanic (normally dealer) who has spares. If they can't fix it in a couple hours they bring a loaner you can use until they get it fixed. Simple problems can be done in an hour by your plan, but anything complex you are in the shop instead of the field for hours.

whatshisface 3y ago

>They don't want customers going the cheap aftermarket route 11 months of the year because one month of sales can't sustain harvest support teams long-term. It can if you charge more for it...

Loughla 3y ago
So they already do that. There is a very distinct price difference between off season repairs and emergency field repairs. Both on labor and parts.

m463 3y ago

> They will get you going again in a day or two what if they prevent you from doing it yourself in a minute or two?

donmcronald 3y ago

> In this analogy peak pricing has a limit: it would very quickly make harvesting the crop unprofitable. What? Equalizing or normalizing the costs over the entire year by price gouging on repairs during non-peak months doesn't suddenly make the total cost any different. Farmer's are absolutely bearing the cost having a service network that can satisfy peak demand no matter what kind of pricing scheme is backing it. If a low priority repair costs $5 in the off season, but $55 for the same thing during the peak, farmers aren't better off getting charged $30 for both. It's still $60 at the end of the year. If anything, that penalizes the farmer that's doing preventative maintenance in the off-season and benefits the farmer that leaves their equipment to break down at critical times. The responsible person is subsidizing the irresponsible person in that case.

JohnFen 3y ago

Then surely, instead of trying to poison the legal landscape around these issues for everybody, they could cover their business needs by no longer selling that equipment, but leasing it. Then they could make the terms of the lease be amenable to the economics of their business without working to make things worse for everybody else.

robbiep 3y ago

We’ve got 2 S680s my uncle has a couple of X10s and a whole shed of s7 series and our whole district is green. There were a lot of green machines sitting on the sidelines this harvest waiting for technicians to get their shit together to reset this or service that. Back in the era of the 95XX or even 8820s you could do it all yourself. Now a fucking light comes on and you need to call someone to drive over an hour from our nearest dealership to plug in his gizmo to say this needs to happen. Not to mention they totally understock on prices. Harvesting is rapidly becoming unprofitable. Just because an X10 can strip 50 tons an hour doesn’t mean it’s worthwhile at $1m a machine. That’s why we keep a CTS2 on the sidelines. Mightn’t strip as fast but at least it’s reliable and we can maintain it without getting a site visit

autoexec 3y ago

> If you're with JD... they have a crews of engineers/mechanics and semi trailers loaded with parts driving around the country following the harvest. They will get you going again in a day or two, not 1-4 weeks later when some other dealer can fit you in or when the spare part you need arrives. that's not the story farmers are telling. Farmers have been complaining about not being able to get parts (https://talk.newagtalk.com/forums/thread-view.asp?tid=1044504&DisplayType=nested https://talk.newagtalk.com/forums/thread-view.asp?tid=104450...) and saying that because they're forced to get repairs from John Deere that single source for service gets overwhelmed and they can end up waiting for weeks on technicians while watching their crops rot away. (https://www.ifixit.com/News/62788/john-deere-has-been-violating-the-clean-air-act-by-restricting-repair https://www.ifixit.com/News/62788/john-deere-has-been-violat...)

xenadu02 3y ago
I'm not saying I agree with JD, just explaining their reasoning.