MORTLACH, Sask. – A combine is one of the most underused pieces of equipment on a farm. Eugene Toth said the MachineryLink combine lease service can eliminate the financial pressure of a large asset.
“You can use your capital for other things on the farm,” said Toth, Canadian regional sales manager with MachineryLink in Lacombe, Alta.
Toth said the MachineryLink Canadian contract has a 200 hour minimum with a three year term.
“There are shorter contracts in the (United) States for the mid wheat stops, but these September contracts have no end date to them. When a guy gets a combine up here, he can keep it until he’s done. It’s not going to go anywhere else. It’s too late to make that October corn run back in the States,” said Toth.
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For 2007, MachineryLink has three models available – John Deere 9760, John Deere 9660 and Case IH 2388. Toth said a 200 hour contract works out to around $30,000 a year.
“A 9660 Deere works out to $153 an hour for the first 200. Then it drops to $73 an hour after 200 separator hours, so it’s pretty price effective once it gets over that 200 mark,” he said.
“The Case combine is $146 and the big Deere, which I didn’t have any availability, is $163. But those rates will change for 2008.”
Toth said farmers could sign a 250 hour lease for three years or a 300 hour lease for three years, as well. But the minimum is 200.
“And 200 hours up here is a limited clientele. That’s probably a 2,000 acre guy minimum. So if they get up to 250 hours, that brings the rate down considerably.”
Toth said the customer is responsible for the headers. The 200 hour minimum gets the combine in the yard, with no freight costs in or out. Maintenance and repairs are covered by MachineryLink.
“If you have a breakdown, there’s a 24 hour toll-free number in Kansas that the customer calls. They look after scheduling either their own people or dealer to fix it. Or if the customer’s going to put the part on it, the part is available to pick up. There’s different options, but they have to go through the service hotline to get it going,” said Toth.
“If a combine breaks down and they can’t fix it, we’ll just bring up another combine, like if a motor blows or something like that.”
Toth said the contract is based on separator hours.
“There is a charge for engine hours if they get more than 25 percent over the separator hours, but that wouldn’t happen up here unless the land was a long ways apart. The combines I’ve dealt with in the past wouldn’t get anywhere near what the range is there.”
The customer is responsible for insurance, and cleaning up after he’s done so the combine can move to the next stop.
MachineryLink has been operating in the U.S. for the past six years. It has about 650 U.S. clients using more than 200 combines. Toth expects to see some Case 2588 models and 70 series Deere combines in the fleet for 2008.
“We try to get at least three stops out of each combine. There’s some start in California and come up the Pacific Northwest. But the main run is through the Midwest. They start in Texas, do the Midwest, a fall stop up north, then they go back down for corn,” he said.
“The average age of the fleet right now is two years old. If it’s a three stop, they’ll put on between 500 and 600 hours a year per combine. I don’t get involved in purchasing and selling, but they do sell after a certain time. The fleet is in excess of 200 units and that’s gone up every year for the past six years.”
Toth has a calculator program available to compare a combine purchase to a MachineryLink lease.
“I do that a fair bit with the serious guys. I’ll sit down at the kitchen table and crunch some numbers with them,” he said.
“When you do a contract, the price is fixed for three years, so it’s a good cash flow tool.”
More information is available at www.machinerylink.com or Toth can be reached at 403-782-6688.
