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Scrap iron beauty in eye of beholder

John Walter 02/02/2012 @ 11:27am

Farmers have various views about the value of scrap iron that accumulates around the farm. Some see old machinery and other salvaged metal as a valuable resource for do-it-yourself projects, while others view the stuff  mostly as an eyesore and something to sell as scrap.

In the Agriculture.com Shop Talk forum, a Michigan farmer asked recently: “How big is your scrap iron pile, or should I say ‘salvage’ iron, the stuff you keep around thinking you will use it for bracing or repurposing?”

Some in the group look at most scrap iron as having potential for reuse, within reason:

“I save dang near anything that has a chance of being useful,” said a Nebraska farmer. “Comes from being a tinkerer, as well as the ‘I might need this someday' thought. With the machinery I run, I need repair iron.”

Others are more discriminating.

Certain kinds of scrap are well worth saving, says "CJDave," an Iowa farmer: Of course, I save all the useful shapes like angle and channel, no matter how small they are, and also try to save a few sizes of heavy pipe, like center pole from a wagon, if they happen to become scrap. I have a few pieces of 3/8" plate that I have been cutting shapes out of for several years.”

And some prefer new metal when they need it.

Several farmers mentioned that they try to keep scrap piles and junked machinery cleaned up, partly in an effort to maintain an orderly looking farm yard. Farmers say that nearby machine shops and manufacturers are good sources of scrap materials when it’s needed.

“I don't like to have a bunch of stuff lying around rusting,” says "James 22, who has access to a nearby machine/blacksmith shop. “Much more pleasant to use new iron, and you can use exactly what is needed,” he says.

Selling scrap iron

For farmers selling scrap iron, prices have been attractive lately. Prices reported by farmers in the forum ranged from $205 per ton, unprepared, in northwest Iowa to $400/ton, prepared, in northwest Minnesota.

With prepared scrap, the material must be cut to certain specifications. Number one scrap is required to be cut to three foot or smaller sections, and be at least quarter-inch thick, says Laura Palmer, P&L Recycling, Weldon, Iowa.

In late January, her firm was paying farmers $200/ton for number one scrap iron. “Prices are really good for this time of year. They’re normally lower in winter.” says Palmer.

 
The company is paying $180 per ton delivered for junked farm machinery.

Scrap iron brokers generally provide P&L weekly price updates. Copper prices fluctuate frequently, however, as often as three times a week, Palmer says. “Steel prices stay good for a month at a time.”

While farm scrap may be at the bottom of the heap, so to speak, its value follows commodity and equity markets. Scrap values seem to follow the stock market, Palmer says. “If the Dow drops a lot, we’ll see a change in our prices," Palmer says.

Other price indicators can be seen in global commodity exchanges, Marc Dulin, MetalPrices.com, told Agriculture.com

“Scrap Iron, LME steel billet prices, SGX iron ore prices reflect different stages in the production of steel product and price discovery related to the process,” says Dulin.  The London Metal Exchange offers futures and options contracts for non-ferrous metals. Iron ore is one of the bulk commodities traded on the Singapore Exchange.

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