Remember the good old days, when machinery prices were low? Back then — meaning the ’60s and ’70s — nearly every family farm could afford to park a new tractor in the yard at least once in a while, right?
What if I suggested these are the good old days — and I’m not just quoting lyrics from the old Carly Simon song. Today, machinery may offer better value for the money than it ever has. Don’t believe it? Here are a few things to consider.
First, let’s compare sticker prices by taking a look at a comparable tractor over the years — as much as it is possible to compare today’s tractors to those from decades past. Of course, historical MSRP numbers will be much lower, so they will have to be adjusted to something comparable to today’s dollars to make a meaningful comparison.
Using the Bank of Canada’s inflation calculator and exchange rate records, it is possible to convert those old prices to 2009 dollars.
Picking a tractor with 95 PTO horsepower will allow for a comparison back a few decades. Sticking with one brand will make things easier. The staff at John Deere supplied the actual MSRPs for a couple of their tractors from the ’60s and ’70s. Comparing them to the list price of a comparable, current model will put my statement to the test.
Starting right in the middle of the decade of peace and love, 1965, ought to be a good place. One of the most popular tractors then was the John Deere 4020. A diesel, row crop, with syncro-range transmission, deluxe seat, wide front end and three-point hitch had a sticker price of US$6,430.00, converting that to Canadian dollars then would have cost about C$6,960.
On the surface, that sounds like a real bargain compared to current prices, but when converted to 2009 dollars, that number jumps to $47,196. Still, that’s not too bad. It’s about the cost of a new, high-end pick up.
Jumping ahead a decade to 1975, the 4020 had been replaced by the 4230 from Deere’s “New Generation” tractor line. The 4230 was the new 4020, albeit with five added horsepower. With an open operator station, quad range transmission, deluxe seat, ROPS and adjustable front end, it listed for US$15,906 (Can$16,325). The Bank of Canada’s inflation calculator translates that to $62,780 in 2009 dollars.
In Deere’s 2009 model line up, the 6115D has a horsepower rating of 95, comparable to the previous two. Using the build and price feature on Deere.com,a two-wheel drive version with an open station, 9/3 syncro transmission, 18.4x 34 bias rear tires and dual SCVs lists at US$38,209 (Can$40,501)
The 2009 tractor is $6,695 cheaper than the 4020 and an impressive $22,279 cheaper than the 4230. Suddenly, those old sticker prices don’t look so attractive, do they? In fact, that new tractor turns out to be a real bargain, in relative terms.
While these are all Deeres, manufacturers don’t price their offerings in isolation. The same trend would be obvious tracking models from any of the major brands.
NOW CONS IDER INTEREST RATES
Step two in our comparison is a look at interest rates. Deere, like most of its competitors, is offering 0 per cent financing on tractors like the 6115D. In 1965, the Bank of Canada interest rate was 4.25 per cent for most of the year. In 1975 it was 8.25, rising to 9.00. Add two or three per cent onto those to get something close to a consumer loan rate. That makes financing the new tractor a lot cheaper, too.
ADD IN EXTRA EFFICIENCY
Barry Nelson, John Deere’s manager of media relations, says today’s machinery is more efficient. “It’s providing more value,” he says. “Farmers are getting more done in less time.”
That is true in part because of features and technologies that weren’t available in previous decades.
David C. Everitt, president of Deere’s agriculture and turf division, made a similar point in a speech in Chicago in early December. “Our smallest U. S.-made combine is more productive than our largest machine was in 2000,” he said. “We’re seeing a single John Deere combine replacing as many as three outdated, less fuel-efficient machines in growing ag economies like Russia.”
Leading that increase in productivity are technologies such as GPS and auto steer, which allow producers to reduce input costs by minimizing overlaps. They also minimize operator fatigue, making it easier to spend long days in the field.
Nelson suggests looking at machinery on a cost-per-acre basis is even more useful than just comparing purchase prices over the years. Subtract the trade-in value of a machine from its original purchase price and divide that by the number of acres worked over its life. “When you look at it (modern machinery) that way, it’s a pretty good deal,” he adds.
Of course, 95-horsepower two-wheel drives, with open operator stations are pretty rare when it comes to primary field tractors now. And features like front-wheel assist and comfortable cabs are now so common many view them as standard equipment. New transmission options like shuttle shifts and CVTs are also becoming must haves. That’s not surprising — they make life a lot easier.
And when riding in one of today’s ultra-quiet ROPS cabs, complete with cup holder and power point outlet, you can listen to Carly Simon remind you these are the good old days on one of the oldies satellite radio stations, if you still feel nostalgic.
Scott Garvey specializes in writing about tractors and farm machinery technology for publications in Canada and Great Britain. He’s also a former affiliate member of the Society of Automotive Engineers (SAE). He farms near Moosomin, Sask.