Q: Could you explain how you’re actually using this model to look at future industry trends? And is that making you maybe make a decision on say that second trade or third trade, to either just move it — whether it’s auction or aggressive pricing. How does the future outlook play into your decision making with the trades?
A: When it comes to the future trade-ins, I’m not so much concerned about trying to find a home for the $100,000 combine. What I’m more concerned about is that first and second trade that are $350,000 or $280,000 machines. So when I look out there, I try to see how many guys might be interested in those units. Unfortunately, right now when we go to talk to somebody about a high dollar, late, low hour used model, that same person is probably someone who could buy a new one, too. So we have to be careful who we go talk to. We have to get to know their business before we start saying, “Hey, why don’t you buy a new one?” Because there’s a likely chance they should be buying a used one.
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Here’s an example of something I’ve done before. I say if we just get rid of these four or five first generation trade-in combines, we’ve pretty much solved our problem when it comes to the combine. But, what our issues are going to be downstream. I think the misconception sometimes with stuff like this is that it’s not 15 or 20 combines that you’re looking at. It’s just five or six, maybe seven combines that you have to figure out what you’re going to do with. So, to your answer your question, I’m more concerned about that first and second generation trade-in than I am the tail end stuff.
