Connect with us

Demo Trading

4 Ways to Get More Value Out of Agriculture Equipment and Technology

From retrofitting existing equipment to routine maintenance, there are several ways growers and their advisors can maximize use of their ag equipment and technology. Uncertain. Challenging. Or the one we continue to hear the most, unprecedented.

From retrofitting existing equipment to routine maintenance, there are several ways growers and their advisors can maximize use of their ag equipment and technology.

Advertisement

Uncertain. Challenging. Or the one we continue to hear the most, unprecedented.

Even as companies are trying to show empathy with all the chaos COVID-19 has caused, these buzzwords have started to fall on deaf ears as we are inundated with corporate placations on struggle and fear. Although we may be tired of hearing them, the root of the words have truth: economically, things are tricky right now.

While farms are considered essential businesses and haven’t been shut down during the pandemic, to say growers are operating under “a business as usual” philosophy couldn’t be further from the truth, especially when it comes to equipment and financial management strategies.

Investing in the Existing
Growers’ equipment that was slated for a sale or trade-in at the local dealership may now have to remain fixtures in the fleet for another year, or two, or even more. New technology solutions they hoped to add this year may have to be put off for the time being.

But this isn’t a bad thing. Buying new machines and technology are not the only ways we can advise growers to invest in their business and remain profitable.

It’s always good advice to help growers get the most out of what they have but in these uncertain times (there, I had to say it), this advice becomes crucial. How can we help keep those older pieces from deflating in value faster than necessary? How do we advise keeping those used items valuable for the operation instead of feeling old and slow?

Looking ahead to this winter and with a little forethought, we can make the most out of the tagalong equipment and technology that may be around for another year or two – or more. Agronomic and technological tools are often thought of as too expensive or inaccessible, but there are many ways to upgrade equipment without buying brand now.

With the economic road ahead still unclear, here are four ways growers can invest in their existing equipment and technology.

1. Utilize the Under- (or not at all) Utilized

A seasoned piece of equipment may have new value by properly utilizing its features fully, particularly when it comes to technology. Too often, growers fear technology, seeing it as something unknown they have to learn. However, in many cases that “new” technology isn’t necessarily that new, it’s been there all along, and fully-utilizing it may mean increasing productivity, and reducing cost and time spent.

Story from the Field
I was recently calling on hundreds of growers that needed to accept terms and conditions on agronomic software through our equipment partner, John Deere. I learned, not only were many of them not using the software, they were not even aware of it and what it was capable of doing for their farm management. More importantly, they did not know how much value they were leaving on the table by not using the technology and John Deere Operations Center, an account which they already had access. In fact, a couple of them thought I was trying to sell them the program, not simply encourage use of a software they already had.

As a follow up, one grower asked me to come out and show him how to use the Operations Center. As I was going through the different tools, he was engaged in the opportunity and asked if needed to upgrade from his old display and GPS equipment to utilize the software.

The answer? No upgrades were needed! What was even better, the software was 100% free.

He will now be saving money with map creation next spring – a task which he had paid for and relied on from his seed dealer – as well as saving time with his sprayer record-keeping – which he could have been utilizing with his rate controller – among other things.

Total extra cost to this grower? Zero dollars.

Added benefit of fully utilizing technology already purchased? Priceless.

2. Look for Upgrade Options

New features and technology are among the most attractive reasoning for buying new equipment, to stay ahead of the curve and remain competitive. When new machine purchases just are not feasible, it is good to know that most new opportunities from equipment manufacturers can be retrofitted back to previous year’s equipment. Instead of buying that new piece of equipment, growers may be able to give the reasonably newer pieces of equipment a quick upgrade.

Story from the Field
Earlier this spring, a brand-new John Deere R4033 sprayer sat outside a grower’s shop. We excitedly looked around the straight-out-of-the-box (quite literally) sprayer that he had received to demo and was going to use the next day.

As we did our pre-start walkaround, we went over the agronomy and business highlights of some of the features – but I could tell he was uncomfortable. When he had signed up for the demo, he had been eager and optimistic about adding the new sprayer to his fleet, particularly because he was interested in its Deere ExactApply system.

Now he had arrived at demo day and was becoming acutely aware that a new sprayer wasn’t likely to happen in the next year or two. But he still had a fundamental need for the ExactApply for production success.

When he admitted this, I explained that ExactApply could be retrofitted onto any R-Series 2014 or newer. Rather than break the bank buying new, he might be able to find a used sprayer on the market and retrofit it with ExactApply.

This is a valuable lesson for growers and trusted advisors. For us advisors especially, it might be worth building a retrofitting plan for a grower, one that focuses on utilizing value-added or newer features on existing equipment as a way to keep it functional and high-performing for a few more years.

This can also be a good strategy for increasing the trade-in value of the equipment down the road, even during some critical years of depreciation if a grower can’t afford to trade in during that window of opportunity. It certainly cannot stop depreciation, but it might make it manageable until the grower can afford to update keystone pieces of equipment.

3. Don’t Allow Wear Out to Wear Down

While it may not be this year or even next, if a grower plans to trade in a tractor, the best advice to give right now is to maintain and care for that machine at 100%.

Story from the Field
“I felt like I had to take my shoes off before getting into the cab!” my co-worker quietly exclaimed as he got out of a customer’s tractor. I laughed because I expected nothing less from this grower and anything he owned. Even his riding lawnmower had a gleaming finish.

The tractor was a 2010 Deere 8285R but you would never guess it’s a decade old by looking at it. One could assume it was fresh from the factory in Moline, IL. The interior was pristine, the oil ran clear, and the grower had documented – down to the last filter change – what work had been done in his shop.

Simply put, well-documented and systematic maintenance, along with meticulous cleaning and upkeep, are the simplest yet most underutilized values that can be put into a tractor. Some growers don’t want to bring in their equipment for annual inspections with their dealer partner but all should be handling their own maintenance – then recording the work that has been done.

Not only is it a solid investment in extending the life of a machine, the proof of routine maintenance and overall care is evaluated on a trade-in. It is hard to replace a first impression so taking the time to care for the machine and keep it in good condition can go a long way in adding value. Plus, there’s the simple value of working in a cab that doesn’t have an anxiety-building amount of dirt, garbage, and clutter. As my mom used to say, mud is incidental, grime takes time.

While it may not be this year or next year, if the grower is planning to trade in that tractor, a strategy of care and cleaning establishes him or her to get the best value when that time comes.

4. Don’t Let the Little Things Get Away

Speaking of investing in today’s equipment for tomorrow’s trade-in, the added value growers can put into their machines goes beyond cleaning and maintenance, to also include more significant upgrades and repairs.

Story from the Field
As an example, consider precision equipment firmware updates. One of my customers is the proud owner of a 12-year-old, Deere 7R Series that still had a 2600 display and a StarFire iTC geolocation system. She asked my coworker and me to look at it for an appraisal and, as we jumped in, learned it was the fastest-booting 2600 we’d seen in years. It took only seconds to load and was ready to work even before we were.

The simple reason: the grower had been updating it, like clockwork. Every time there was a new update, she was downloading her data into Operations Center and deleting it off the display as soon she was done with it. A simple but effective practice is making sure updates are done and the data in managed.

Someone who had not been so diligent may have needed a new system, one that would cost thousands of dollars. In this case, the grower was able to keep the system and upgrade out of the iTC (which was going to be non-functional in a few months) for less than half the cost.

The concept isn’t just in precision technology that needs occasional fixes. How many times has something non-vital broken off on something you own and you just shrug your shoulders? I am as guilty as anyone; almost everything I own has a part broken off that I just never get around to fixing. However, for growers, those little repairs can make an item feel managed and increase the experience of sitting in that cab an extra year or two, not to mention increase trade-in the value.

Many times, especially on ground-engaging equipment like tillage equipment or planters, it is advantageous to do repairs before trading it in. An example: Growers should consider replacing disk blades on a planter. While it may cost a few thousand dollars, it will cost the dealership taking the trade-in much more, even double what it would cost the grower. The costs, such as paying for the parts and the labor from certified technicians on staff will be reflected back on the grower in the trade-in value.

It doesn’t matter if a grower is holding onto a piece of equipment just to get through a hard time or pursuing the opportunity to milk it for every last bit of value before trading in. Investing in a machine or technology now, in any of these four ways, will pay off now and down the road.



0



Continue Reading
Advertisement

Broker news

Donald Trump blasts ‘fools’ who oppose good Russian ties

US President-elect Donald Trump has posted a progression of tweets censuring the individuals who contradict great relations with Russia as “‘dumb’ individuals, or nitwits”.

Mr Trump promised to work with Russia “to comprehend a portion of the numerous… squeezing issues and issues of the WORLD!”

His remarks came after an insight report said Russia’s leader had attempted to help a Trump race triumph.

Mr Trump said Democrats were to be faulted for “gross carelessness” in permitting their servers to be hacked.

In a progression of tweets on Saturday, Mr Trump said that having a decent association with Russia was “no terrible thing” and that “lone “idiotic” individuals, or simpletons, would believe that it is awful!”

He included that Russia would regard the US increasingly when he was president

Continue Reading

Broker news

Bulls and Bears Took on More Currency Exposure in Week Through January

he most striking improvement among theoretical situating toward the finish of a year ago and the primary session of 2017 is not that modification were little. There was just a single gross theoretical position modification of more than 10k contracts. With sterling apparently not able to maintain even humble upticks, the bears added 13.1k contracts to the gross short position, lifting it to 120.2k contracts.

Or maybe, it is eminent that examiners for the most part added to positions, long and short, as opposed to close positions at the very end of the year. Examiners added to net long outside cash prospects positions, aside from in the Japanese yen and Swiss franc where 2.6k and 2.5k contracts were exchanged separately. Examiners likewise added to gross short positions. Here there was just a single exemption, the Japanese yen. Despite the fact that the dollar shut comprehensively higher in front of the end of the week, every one of the monetary forms we track here, spare the Mexican peso, picked up against the dollar in the three sessions since the finish of the CFTC reporting period.

Every once in a while it is helpful to review why many market members take a gander at the theoretical situating in the cash fates advertise. It is not that the outside trade is essentially a prospects showcase. It is principally an over-the-counter market in which every day turnover midpoints in abundance of $5 trillion a day.

Trade exchanged monetary forms and alternatives represented around 3% of the normal day by day turnover as indicated by the BIS study. Be that as it may, past reviews have discovered some contemporaneous connection between’s market heading and net position changes. We think it additionally offers knowledge into a specific market section of pattern supporters and energy brokers. It is not by any means the only device, yet one of a few data sources.

One ramifications of this is albeit theoretical positions in the money fates market are moderately extensive, it is still little contrasted and the money showcase. Along these lines, it is difficult to see the genuine essentialness of a record vast position, as though there is some market top. At some point, examiners are not driving the costs, possibly there is another fragment, national banks, enterprises, as well as genuine cash that is more essential at any given minute.

We invest some energy taking a gander at gross positions instead of just net theoretical positions, which is the more customary approach. We think a more granular look is frequently fundamental. There is a distinction between short-covering, for instance, and new purchasing, however it appears to be identical in the net. Additionally, the gross position is the place the introduction is not the net position. A net position of zero does not mean the market is nonpartisan. Net positions could be huge, which implies a short press or a negative stun could in any case troublesome. The positions that must be balanced are captured in the gross measure not the net figure.

We find numerous customers are likewise keen on theoretical situating in the US Treasuries and oil. The net and gross short theoretical Treasury position has swelled to new records. The bears added 23.8k contracts to the as of now record net short position, lifting it to 616.2k contracts. The bulls attempted to pick a base and added about 20k contracts to the gross long position, which now remains at 471.2k contracts. These modification prompted to a 3.8k contract increment in the net short position to 344.9k contracts.

The bulls delayed in the oil prospects toward the finish of 2016. They exchanged short of what one thousand contracts, leaving 608.1k gross in length contracts. The bears added 4.1k contracts to the gross short position, giving them 168k. These conformities trimmed the net long position by very nearly 5k contracts to 440.1k.

Continue Reading

Broker news

3 ways to profit in the ‘year of the dollar’

In December, the Federal Reserve raised loan fees for the second time since the Great Recession and included the desire of a 2017 financing cost climb to its gauge. Furthermore, only a couple days prior, the abundantly anticipated minutes from the most recent Fed meeting demonstrated the most hawkish tone from the national bank in two years.

In the meantime, Europe has been dove into political turmoil after a year ago’s Brexit vote and the later abdication of Italy’s leader. Somewhere else, the Bank of Japan proceeds down the way of negative rates and forceful security purchasing.

Put it all together, and it isn’t astounding that the U.S. Dollar Index is up against 14-year highs.

Speculators may have missed so much discussion on account of babble about the Dow Jones Industrial Average at the end of the day almost hitting 20,000. Be that as it may, paying little respect to your assignment to stocks or your venture skyline, this sort of huge picture incline in the dollar implies right now is an ideal opportunity to position your portfolio to benefit and, maybe most critical, to keep away from a portion of the pitfalls that can originate from a solid local cash.

Here are a couple ideas dollar exchanges ought to consider:

Residential plays over multinationals

There’s a considerable measure of seek after shopper stocks in 2017 on account of an enhancing work market and any desires for a jolt under a GOP-controlled Congress and President Donald Trump. In any case, remember that not all retailers are made equivalent especially those with abroad operations that are adversely affected by the wide dissimilarity in monetary standards at this moment.

For example, retailer Wal-Mart Stores Inc.(WMT) said troublesome money trade rates shaved very nearly 2.5% off profit for each partake in the second quarter of 2016. On the other hand consider that in the monetary final quarter of 2016, athletic attire goliath Nike Inc.(NKE) saw its income development cut down the middle because of forex weights, from 12% year-over-year in consistent cash measures to only 6% including real money changes.

To take advantage of the “reflation” exchange that numerous financial specialists are counts on in 2017, you need to represent the headwinds that a solid dollar are making for multinationals at this moment. The most ideal approach to do that is to consider customer plays that do by far most of their business here in the U.S. – for example, Foot Locker Inc.(FL), which has been an uncommon splendid spot in retail throughout the most recent couple of years.

Supported money ETFs

Obviously, in the event that you need a steady portfolio, you can’t just purchase just local centered values. Geographic expansion is similarly as imperative as enhancement crosswise over parts and resource classes. Such a large number of financial specialists keep on holding worldwide plays in light of a legitimate concern for a balanced portfolio, regardless of the possibility that it implies battling a daunting struggle as a result of a solid dollar.

The uplifting news, notwithstanding, is that you don’t need to leave yourself to torment through a solid dollar and a powerless euro when you put resources into Europe. Nor do you need to stress over the yen-dollar conversion standard when you put resources into Japan. That is on account of there’s an entire group of cash supported ETFs to permit financial specialists to put their cash in outside business sectors yet keep away from forex issues.

Consider that Japan’s Nikkei 225 file is up around 25% from its July 2016 lows. The WisdomTree Japan Hedged Equity Fund(DXJ) is up 35% in a similar period on account of assurance from forex issues and a somewhat better-performing rundown of stocks – while the non-supported iShares MSCI Japan ETF(EWJ) is up only 10% in a similar period because of battling a difficult task against a solid dollar.

In the event that you need to differentiate your portfolio comprehensively, you ought to consider supported assets that incorporate the Japan-centered DXJ, the WisdomTree Europe Hedged Equity Fund(HEDJ) to play Europe or the iShares money Hedged MSCI EAFE ETF (HEFA) for developing markets.

Dollar list ETF

In the event that you are searching for an immediate play on a rising dollar as opposed to putting resources into stocks, figuring out how to exchange remote trade can appear like an overwhelming undertaking. Gratefully, there’s the PowerShares DB US Dollar Index Bullish Fund(UUP).

This ETF is attached to the U.S. Dollar Index, which is a measure of the greenback against a wicker container of other worldwide monetary standards including the yen and the euro. It’s a straight money play, however that doesn’t make it straightforward or hazard free. In the event that the dollar debilitates, you’ll lose cash similarly as though you’re putting resources into a stock that has fallen on difficult circumstances. Furthermore, obviously, PowerShares takes a little cut of your speculations en route that indicates 0.8% yearly, or $80 a year on each $10,000 contributed.

Still, in the event that you need to conjecture on the dollar or support against a solid U.S. cash keeping down other worldwide ventures on your rundown, it’s maybe the least demanding approach to do as such for generally financial specialists.

Continue Reading

Trending