Deere & Company: Equipment utilization & Sugar Cane Economics

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How much would you be saving? What is the comparison between having a self-driving tractor and a tractor driver?

With benefits and everything, it would be around $20 an hour. So, if you have four running, that's $80 per hour in cost. Meanwhile, a technician would cost only $30 an hour. If a technician can control four tractors, you're saving at least $50 an hour just on labor. Additionally, these tractors are very accurate, so you don't have the human error of trying to go straight. They do an excellent job.

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I want to revisit the topic of consolidation and farms getting bigger. What is the minimum size to operate an efficient and profitable farm in the U.S., and how has that changed?

It's a lot because costs are high. For instance, the cost of purchasing equipment has increased substantially. Six years ago, a 150-horsepower tractor cost around $90,000 to $100,000. Now, it costs $170,000 to $180,000.

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And that's it? You don't measure, for example, the output you get from a sprayer?

The output is extremely similar because both John Deere and Case offer models with almost the same capabilities. You don't see many differences in performance. What really makes the difference is the cost of running it and the downtime. How often it breaks is crucial because all machines break, so minimizing downtime is important. Downtime is based on the quality of the machine, the quality of the build, and the availability of parts. Those are the two factors we really care about.

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