cereal prices continue tanking, page-17

Regarding machinery purchases, I tend to disagree with the sentiment here.

We have just orded a new JD 9670 sts header. A few years earlier than normal thanks to Kevs crazy 50% investment allowance. It will cost $480k, so we get $240k off our taxable income, and that will be handy as we've had a few great seasons in a row here.

Here are the figures, and tell me what I've done wrong.

Old machine is 8 years old. Done 1200 separator hours. So at contract rates, even say $300 an hour thats $360k in contractor rates.

Old machine was JD 9650 sts. Cost $340k new 8 years ago. We are getting $250k trade in for it.

So in theory it cost 90k to own for 8 years. Obviously with inflation, opportunity costs, repairs and maintainance it would have cost heaps more to own than that. But I still think we will be way in front.

Add on the one off tax savings then the interest costs etc.

We get to harvest our crop when we want. Last years wheat harvest was a debarcle. A wet Nov and Dec saw contractors held up for weeks. People saw the values of their crops halve as they got 100s of mills of rain on ripe crops.

You should see the machinery and headers sold in northern NSW in the last few months. Between Kevs stimulous [which 95% went to US machinery manufacturers] and the wet disasterous harvest, the 'don't own a header' view has changed dramatically here.

It also suits farms in this area. We are a reliable consistant producer. A disasterous crop on the plains might be 3 tonnes/h, rather than a fail. So there is always something to harvest. Plus summer and winter, twice a year. A more marginal area would be better off with contractors, as lots of times there's nothing to harvest, but in a bumper year theres 5,000 acres all at once, which would be too much for one machine.

That's what I reckon anyway.