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Semi pro

Names that, not too long ago, were unfamiliar when it came to the machinery lineup on a farm.

But as farmers continually look for the most efficient, low-cost ways to bring crop to market, more have turned to investing in a semi. Today, these massive grain movers have become an integral part of many farming operations.

“The move to semis began in the 1990s and accelerated in the 2000s,” says Mark Berwick, North Dakota State University. “A recent study conducted by Denver Tolliver estimates that in North Dakota 56% of grain moves to the elevator in semis. But I think it may be higher.”

Berwick believes what's driven the shift from straight trucks to larger trucks in North Dakota (and other states) are larger operations, increased yields, rationalization of the elevator system, a move to the shuttle elevator system, and relatively cheap combination trucks.

“A new single-axle or tandem truck with box and hoist may cost as much as a used semi and a hopper bottom trailer,” he notes.

When it comes to hauling grain, owning a semi offers a number of advantages to Brent Gengenbach, who farms near Eustis, Nebraska.

● The larger hauling capacity keeps his combine moving in the field and translates into fewer trips to his grain's final destination.

● Semis can travel longer distances, which means he can cast a wider net for marketing options.

● A semi on the road is far safer than a tractor pulling a wagon.

● Gengenbach doesn't have to rely on someone else to transport his grain.

“One of the major reasons for using semis was to keep the corn away from the combine,” he says. “I transport corn about 25 miles to Frito-Lay, and it takes so many trucks to keep things going. During harvest, it's hard to hire trucks because they're in such high demand. If I have my own semi, I have more control over the flow of harvest.”

There are five semis in his lineup today. He realized years ago this was an investment that would add up to savings.

“We bought our first semi in 1979. In Nebraska, a semi can haul 80,000 pounds legally, which translates into about 450 more bushels than a tandem truck,” Gengenbach says. “The increased capacity has not only made me more efficient but also saved on fuel and labor.”

When it comes to shopping for semis, he concentrates on used.

“You don't have to spend a lot of money to have a good old truck,” he notes. “Most of my trucks have 700,000-plus miles on them. If I had to buy one today, I would probably spend from $35,000 to $50,000.”

While some may be skeptical of a vehicle with so many miles, he says if you look closely at the truck you're interested in, typically you can tell whether or not it's been treated right.

“Obviously, I want one that's been well cared for because it will likely do a good job for me,” he says. “That's why who the previous owner was is pretty important to me. It's too expensive to put more money into an old truck if it isn't in good shape to begin with.”

When he does find a nice one, he's likely to keep it. “As long as it's working fine, even though it's old, I'm happy with it,” he says. In fact, he's had some of his trucks for 30-plus years.

Features he pays particular attention to are the transmission and CAT motors. “I like the 13-speed, and most guys can get along with those fine,” he notes. “You have all of those gears to pull loads in and out of fields and the flexibility of going from the field to the road.”

According to Lonnie Crownover, Kenworth Mid-Iowa, a deep gear ratio is also very important because it provides a lot more power. He notes that most farmers need from 3.70 to 3.90.

“It's important to find the right-size rig that matches the needs of your operation because bigger may not always be better.”

“It will start the load better in soft ground. The less torque you get, the harder it is to get 80,000 pounds, which may have sunk in the dirt, rolling again,” he says.

Time to roll

Like Gengenbach, Lowell Garrett, who farms near Adel, Iowa, isn't willing to wait on a truck.

“I have to have them to keep everything moving during harvest,” Garrett says. “Before we invested in a semi, we weren't that big. I farmed about 600 acres and had a small truck and used wagons to load it.”

But as his operation grew, he needed something with more capacity to move grain quickly. Today, Garrett owns three semis with another one on the way to handle the 6,000 acres he covers.

Unlike Gengenbach, Garrett concentrates on new semis.

“I won't buy used because when you need it, you have to have it,” he says. “No matter what brand it is, with that many miles (400,000 or more), something will inevitably break down.”

He admits new equipment has its share of problems, too. But the likelihood of a new truck breaking down compared to one with 400,000-plus miles is a lot less.

“Most used trucks have from 300,000 to 500,000 miles on them. Any semi that has that many miles is not going to be a machine you can just jump in and use,” he says. “There's always something leaking, something wrong. It's just part of owning a used truck.”

Some people are willing to put up with that, but he's not. “With such a short time frame during harvest, I can't wait for a broken down truck,” he says.

Garrett puts about 30,000 miles on each truck in a year, which is considerably higher than Gengenbach. It's another factor that has pushed him toward the new truck market.

“A tremendous amount of exertion is put on the clutches, steering, and suspension because I'm making shorter trips and hauling on rougher roads. That takes a toll on a truck, especially if it's used,” he says.

When one of his trucks hits the 100,000-mile mark, he says it's time to trade it in.

When shopping for a semi, there are certain things Garrett likes.

“I'm after the higher horsepower engines – closer to 600 hp. All of our new trucks are triple axles, so we can haul the 96,000-pound weight limit,” he says. “That usually requires an 18-speed transmission to give me more selection, and I'm into the 18-speed automatic, which is more fuel efficient.”

A new Iowa law, which went into effect on July 1, 2010, expanded the types of commodities that trucks in Iowa can carry using six- or seven-axle configurations. Those extra axles were already allowed for some products, but not for grain. The old weight limit of 80,000 pounds still applies for five-axle configurations. But the new law allows some trucks to haul up to 90,000 pounds on six axles and up to 96,000 pounds on seven axles.

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As a seasoned semi owner, Garrett says one of the biggest lessons he's learned over the years is that not all trucks are created equal. He's willing to invest more than $150,000, which is what his fourth truck will cost, to get a product he feels is top of the line.

“I learned fast that all trucks aren't the same. I only buy Kenworth because it's quieter, smoother, and turns way shorter,” he says. “But you have to take a truck for a ride to prove it to yourself.”

And quality has a higher price tag. “A Kenworth truck is $3,500 to $5,000 higher than a Peterbilt,” says Crownover.

Gengenbach's trucks are all the same brand, a decision that is driven by both quality and simplicity. “If I have my guys driving all Kenworth, they can figure out pretty quickly how to run them,” he says. “Maintenance is also easier.”

New or used, Crownover says it's important to find the right size rig that matches the needs of your operation, because bigger may not always be better.

“Farmers tend to look at the biggest option to haul the most amount of grain in one trip,” he says. “However, it's more important to find a semi that is right for what you need it to do, including pulling loads out of a field and maneuvering in tight spaces.”

Cost of ownership

Whether it's $50,000 for used or $150,000 to own new, calculating cost of ownership for these two farmers is less important than what a semi brings to their operations as a whole.

“If I had to estimate cost of ownership, it would probably be $1.50 to $2 per mile,” Garrett says. “But honestly, I don't try to pencil it out because I have to have it. It's an integral part of my operation.”

Gengenbach feels the same way. When he adds up his expenses – like repairs, license, and insurance – he says the cost of owning a semi might seem high.

“I put about 10,000 miles on each of my trucks in a year,” he says. “Cost per bushel to own them might seem high for the short time I use them. But with the capacity of today's combines, it only makes sense to have rigs haul the grain away so the combine isn't waiting.”

“In terms of just owning the semi truck and trailer, the costs are essentially depreciation and interest (plus taxes, tags, and insurance),” says Kevin Dhuyvetter, Kansas State University. “Then you need to account for fuel, labor, and repairs to also include the costs of operating it.”

To calculate your semi's cost per mile and cost per bushel, visit www.agmanager.info/farmmgt/machinery/default.asp#3.

Hauling for hire

If you hired Paul Keppler, who owns Keppler Custom Hire, LLC, in Olaf, Iowa, to haul your grain last year, you would have paid anywhere from 10¢ to 22¢ per bushel.

“Last year for us to go from field to farm or to the local elevator (10 miles or less), we'd be at around 10¢ per bushel,” Keppler says. “From the field to the ethanol plant (50 miles one way) we were, typically, at about 22¢ per bushel. And I would adjust those rates if my driver had to sit in line for a long time.”

Keppler's fee is based on what others in the area charge as well as input costs. This year he anticipates his fees will increase.

Dhuyvetter projects 2011 custom rates for corn and soybeans will increase by 6.5% to 8.5%. “Corn is sometimes harvested at a flat rate per bushel (fairly common on irrigated corn), and that rate is projected to be up 5.3% or 1.6¢ per bushel compared to 2010 rates,” he says.

Behind the semi

What you're pulling behind the semi is pretty important, too. And like a semi, you'll first have to decide whether to go new or used.

“If you buy used, I think it's important to have a trailer that's not very old and in good shape so it's not too hard on the people running them,” says Gengenbach.

Consider features such as length, height, number of axles, and composition.

“As soon as Iowa changed its weight limit restrictions, the demand for longer tri-axle trailers increased,” says Keith Jackson of Wilson trailers.

When it comes to height, Jackson says the density of the commodity being hauled is a factor in how tall trailer sides should be.

Steel or aluminum? “Aluminum is much lighter, resists corrosion better, and is more flexible than steel,” says Jackson. “It also allows more payload to be hauled, and maintenance costs are lower.”

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