There are many reasosns why Naegele is selling out. I have gathered most of them in a little essay, that I have written: (warning this is over 6 pages, for copies email me at ralfnew@yahoo.com) The demise of the custom harvester 1. Custom Harvesting 2. Equipment 3. Help 4. Farmers and Crop Varieties 5. Government 1. Custom Harvesting For centuries farmers were in need of extra help to harvest their crops in a timely manner and put them in a safe storage. When harvesting equipment got more mechanized commercial harvesters came into existence, that owned this equipment and provided their services to farmers for a recompense. During World War II the US government became more concerned with securing the food supply for the US and its allies, that it thought of a more efficient way to get the crops of the fields as soon as it is ripe and into safe storage with minimal loss. This led to the birth of the harvest brigade. Independent operators bought combines and trucks and provided their services to farmers for a charge. They cut the grain in the field, separated it and transported it into a storage place, that could be on the farm or a commercial grain elevator. The custom harvester was born. There are several advantages a custom harvester has over a farmer owning his own combine and harvesting his own crop. A custom harvester moves along with the ripening crop from south to north, harvesting many more acres per combine per year than a farmer would. Therefore he can utilize the invested capital in a combine much better and gets a much higher revenue per year out of a combine. The custom harvester provides the support equipment as in grain carts and trucks to take the grain away from the combine so the combine never has to stop during a day. The custom harvester also provides the personnel to operate all his equipment. This personnel is trained before it ever gets to the first field and quickly broken in on the first acres harvested. Therefore the farmer does not have to come up with the capital to invest in combines, grain carts and trucks. He does not have to go out and hire personnel for a couple of days or maybe weeks for his harvest. He does not have to train, feed, accommodate and pay this help and he still gets more combines per acre on his farm than he could ever come up with on his own. This results in a fast, professional, worry free and less expensive harvest for him. To further accommodate a farmers wish for a less expensive harvest, some custom combiners have agreed in providing a partial crew, where a farmer may operate the harvesters combine or provide the hauling of his crops through his own trucks. Unfortunately over the last years this advantage has been getting smaller and smaller for a number of reasons, I have tried to lay out in the following chapters. 2. Equipment From summer 2004 until summer 2005 John Deere has increased the sales prices of their farm machinery approximately 20%, probably due to higher steel prices and energy cost. The used machinery market followed this general price increase of new farm equipment. Another part of the constant increase in production costs of combine harvesters are the changes on the combine itself. In 2000 John Deere has introduced Greenstar and greatly increased the use of computers throughout the combine. These CPUs are connected through an easy to fail CAN bus. The moisture sensor and yield meter provided with Greenstar do not increase the productivity of the combine at all. The moisture measurements were so inaccurate, that taking samples to the grain elevators was just as necessary as before. What it did increase was the cost of the combine and the number of break downs. A corroded contact could easily paralyze the whole combine as I have experienced myself. The adjustable feeder house pitch on the John Deere 60 series combines is another questionable add-on everybody has to pay for, but does not use. The multilink connector works fine on the show room floor but fails in the field after a couple of months, by breaking cables and leaking connectors. The new feeder reverser control and the header lift control also malfunction frequently. The new moisture meter seems to work more accurately sometimes and other times quits completely. After three months of use it was just as unreliable as the old version. The little handheld squeeze tester is still a must. Age old problems however that could easily be addressed have not been improved. For example the idler pulley for the engine serpentine belt still has its bearings on the inside of the thermostat housing. When the bearings fail, what can happen within the first 200 engine hours, as we found out, the whole thermostat housing has to be taken off causing much labor and material cost. A simple solution could have been a shaft sticking out of the thermostat housing with the bearings being on the pulley. A large series of engine failures in the 2005 season further underline the increasing quality problems within the John Deere factories. After 6 years of operating MacDon harvest heads the same pattern has shown. New and costly changes have been made, that improve the performance very little like the new coil spring adapter, while other age old problems like the unbalanced header, that always leans to the left have not been addressed in more than a decade. Operators of other color combines will surely be able to name similar examples on their harvesters. For the dealerships the margins are getting smaller, too. In order to create some income used combines have been leased to farmers. That helps to pay the interest, while they otherwise would have been sitting on the dealers lot, waiting for a buyer. The rent and share idea has been commercialized in a big way lately by a company called machinery link. They rent new combines for a per separator hour charge to farmers. This service includes delivery to the farmers yard and service and repair. Both of these ways create more competition against the custom harvester who is still the only one to provide a turn key operation. 3. Help Since the 1960s have brought us the me first generation education politics and parents in the US and other countries have taught the high school students all their rights but forgot to teach, that there are also duties in life. The result is, that commitment, integrity, servitude and work ethics are widely unknown today. As soon as the young adults on the harvest crews find out that their home made pampering has suddenly stopped their enthusiasm for the harvesting adventure is reduced proportionately. Many times they think, that they are excused for making any kind of mistake, no matter how costly, while the boss shouldnt make a single mistake towards his help without loosing his credibility. They never think about who is paying the bills in a business. If the job doesnt match their assumptions and imaginations, or they dont get padded on the back often enough, or someone at home gets a cold, they take this for a reason to go back home and give up their new jobs, that would have been finished in half a year anyway. That a harvester has a similar obligation to fulfilling his promises towards a customer as the employee should have towards his boss never comes to mind. Foreign help has to be hired causing lots of paper work and cost. But because of the higher obstacles the foreigner has to overcome to find a job abroad and get there he is not only much more committed to fulfill his promises, he is often more educated, has a better attitude and is more willing to learn. Unfortunately the numbers of these kinds of students are declining, too and politicians are thinking more and more how to protect the laziness of their constituents by maybe keeping the job seeking foreigners out of the country. The many 18 hour days a harvest may force us to do, usually have the help burned out after two months. Rainy days in between dont make up for that, because then the help is complaining about the lack of entertainment. Reading a book or going to bed early to make up for lost sleep seems to be impossible in this age. I dont know of any other job where the hours have gone that crazy trying to make a living. Hardly anyone comes back for a second year therefore they all have to be trained every year. Training gets more difficult since machinery gets more complicated, the farmers demand more, government regulations are getting more and the help has a little less experience and a little less education every year. At the same time they think they know everything and dont have to listen to the boss or argue everything he says. 4. Farmers and Crop Varieties Farmers dont make any money, because the government has them strapped tight in a regulation and price grid, that leaves just barely enough money to survive. In their desperation they try lots of things in their fields, that as a side effect make custom harvest more expensive. New tillage practices like strip till want the combine to go up and down the field instead of around and around as we used to and increase the harvest time. Ridge till calls for dual wheels on the combine and no till for a more precise residue spread and fine cut choppers. Trying to pay more attention to varying soil types and ground conditions yield mapping is wished for but for none of these extras or improvements the farmer wants to pay more, because he can hardly afford it. When the crop doesnt look promising spraying against weeds sometimes is omitted leaving the wheat field covered in weeds by harvest time. Again the custom harvester is asked to get the crop of the field for the same money with no compensation for the tremendous time loss caused by the weeds. When the weeds drive the moisture and grain loss up the custom harvester again gets the blame for not doing as good a job as he was expected to do in clean wheat. While the farmers income is getting less and less, their attitude decreases proportionately to the point where they tread a custom harvester like a slave they own or an insurance policy that is waiting in town to be called in anytime or not. In the desperation of income search farmers resort to questionable varieties, that greatly increase harvest difficulties. While the corn head is trying to pick the ear of the corn stalk some corn varieties break the stalk and run the whole plant through the machine, plugging concaves and slowing down harvesting speeds by as much as 50%. Wheat varieties get so bad that the reel easily knocks the head off the stalk and flicking it over the header onto the ground. Other wheat varieties get easily threshed by the reel causing tremendous header loss. They can also have tough straw slowing the harvest speed to half of red varieties. Changing varieties and weather also contribute to changing harvesting times making a steady harvesting run from south to north impossible. The wheat harvest might not be finished in north central Texas, while it is already in full swing in central Kansas. Hail and drought have destroyed much crop. While the farmer has federal crop insurance the custom harvester remains empty handed. 5. Government Government rules and regulations in general have made business very hard causing ever increasing paper work and the need to higher more and more accountance and lawyers. Rules and regulations are increasing the overall cost of doing business and are decreasing the profit leading to lower income and lower income taxes and in effect to lower revenues for the public treasury. Trucking laws are often exempt for custom harvesters. Enforcement personnel however does not know this and fines for none compliance. If a truck breaks down on the highway and has to be towed, law enforcement personnel writes an accident report, even so there was no foreign damage done to anyone or anything. Once on the record the audit is near, costing days of work in the office. Thereby it is often found, that wrong entries in a motor carriers records have been made, but they never get corrected or taken off the books. Commercial trucks, like those of a custom harvester, have to be registered in every state of the U.S. they are operated in. On top of that many states require motor carriers to have separate state permits for each truck. Some states even collect a fee only for custom harvesting. While Washington is busy implementing NAFTA, CAFTA and probably a South American Free Trade, too the 50 states are acting exactly opposite. Insurance for equipment has gone up tremendously especially during the last five years. One major reason is the current lawsuit happy society with judges granting ridiculously high settlements and compensations for sentimental or imagined psychological damage. This law suit money has to come from somewhere and is usually paid by an insurance. The insurance then divides the damage over all its contracts and premiums that it collects, making each and everyones insurance premium go up. The terrorist attack on the world trade center on September 11 2001 has probably caused the highest damage for insurance companies today. Since big insurance companies are operating world wide and are intermingled with each other premiums world wide have gone up with the transportation business being the one that got hit the hardest. Since custom harvesters being commercial carriers and part of the transportation industry, they feel the law suit settlements and 9-11 consequences both on their insurance premium bill. Workmens compensation insurance is meant to give a working man some security in case he gets hurt on the job and as a result is not able to provide labor for his wages anymore. Tight into the general insurance dilemma described above and because workmens comp. is operated by the government with all its inefficiencies and mistakes, these premiums have increased very much, too. On top of that custom harvesting work is categorized as one of the most dangerous jobs and therefore rather expensive to insure. Hazmat regulations in the past have gone so far that it requires a service truck to be placarded as soon as it carries a fuel transfer tank of more than 120 gallon capacity. This transfer tank is usually a tank made of heavy gage steel sitting safely in the back of a service truck surrounded by the service bed and tool boxes. A semi tractor having two 130 gallon fuel tanks made out of paper thin aluminum, bolted to the frame in the open and next to the road subject to being hit first are exempt from this obnoxious laws. With a hazmat placarded vehicle in the fleet a custom harvester has to be registered has a carrier for hazardous material with all the fees and paper work involved. Any driver operating this service truck has to have a Commercial Drivers license with hazmat endorsement. New laws in 2005 further require any CDl holder with hazmat endorsement to be finger printed and approved by the FBI. This approval is impossible to obtain for seasonal help, because it takes too long. As a result most custom harvesters changed their service trucks to not require hazmat placards costing much time and money. The short sided demand from environmental protection groups for cleaner air and reduced emissions has lead to tight laws for how much of a certain gas or particle an engine may emit into the air in proportion to CO2. The laws forced engine manufacturers to change fuel combustion to comply with the emission numbers. As a result the fuel consumption per kilowatt hour went up anywhere from 20% to 50%. We have documented these drastic fuel increases for ourselves while comparing the lexion 470 and 470R in our fleet and the John Deere engines before and after the introduction of the TIER II laws. In addition to this fuel prices from 1998 until 2005 in the US have more than tripled. If a custom harvester would burn an estimated 2 gallons of clear and red diesel combined to harvest one acre of wheat and the price of a clear and red diesel mix would have been 70 cents in 1998, his fuel cost would have increased from Dollar 1.4 to well over 5 Dollars per acre within seven years. This estimated number includes a 20% consumption increase due to the TIER II laws. Custom harvesters that have not updated their equipment to have TIER II engines could only avoid the 20 to 50% increase in fuel consumption. With the coming of TIER III another 20% increase of fuel consumption is almost guarantied. This cost increase can hardly be passed on to a farmer whose commodity prices have increased little since World War II. Federal crop insurance is another government regulation, that greatly influences farming and therefore custom harvesting. In order to put up safeguards for the farmers income against yield loss an insurance was established to provide income for a farmer, that lost his crop due to the weather. The farmer can buy insurance based on average yields, that he had in past years. If, lets say, a drought would destroy the crop a farmer would get money for as much yield as he had insured based on a certain crop price. Through this procedure the farmer had his income mainly secured while the custom harvester was left empty handed in a drought year, just as the grain elevator the fuel sales man etc. I am not advocating subsidies for everybody here, because it would lead to a chain with no end. But subsidizing a small group of people out of the whole nation is neither fair nor does it comply with the US constitution, that permits congress only to provide for the GENERAl welfare of the United States. Furthermore has the federal crop insurance system like any other government welfare program led to much fraud. For instance corn has been planted in areas, where there has been no corn raised before and the average yield was established through that one farmer in the county who happened to have an irrigated field. Expecting a total crop failure farmers hardly prepared a seed bed, used the cheapest and therefore most inadequate seed available and did not apply fertilizer in order to maximize their revenue, what is simply every business mans goal. I do not blame farmers for utilizing the loopholes in the government program since the free market and the liberty of an unregulated enterprise has been taken away from them long ago. The result for the custom harvester is, that the crops in certain areas have changed and have further promoted the interruption of a continues wheat harvest from Texas to North Dakota and into Canada. Cell phone service is very rare in rural areas. While most small towns still have some service, the vast majority of the fields have no cell phone coverage at all. Custom harvesters can not make phone calls or be reach in the field. Sometimes climbing on top of the combine helps or an old analog bag phone still works. Sometimes one has to pull out of the field and drive on top of the next hill. While the further reaching analog technology will be shut down soon, new digital towers are seldom added. The government is collecting a fee for the rural universal fund from every phone bill in the state to subsidize the coverage in rural areas. But the cell phone companies who are receiving the subsidies dont do anything. Old analog phones are not being reactivated with the purpose to get people to switch to digital phones, that have a GPS chip to locate the caller in an emergency. But what is the GPS chip good for, if one cant place the emergency call in the first place, because there is no cell phone coverage in the fieldIJ
