Richard Ivey School of Business The University of Western Ontario IVEY 9BOGBOOT TWILIGHT ACRE FARMS LIMITED Stephen Rene Fray prepared this case under the supervision of Professor Mary Heist solely to provide maternal for class discussion . The authors do not intend to frustrate either affective or meffective handling of a managenal situation . The authors may have disguised cortan names and offer identifying information to protect confidentiality confident they Management Services prohibits any form of reproduction storage or transmittal without it's written permission , Reproduction of thus maternal is not covered under authorization by any reproduction sights organization . To order copies of request permission to reproduce mationals contact way Publishing . Ney Management Services , Co Richard Ney School of Business . The University Westam Onfang , London Ontario Canada NGA 247 phone ( 519 / 681 - 3209 . fox ( 518 681 - 3982 - mal cases fivey own.ca Copyright O 2005 troy Management Services Version : (41 2005-12-03 In early January 2004 , Twilight Acre Farms , a mid -sized family - owned farm had just finished a season of arresting its 4 060 acres of land . At the end of the season , Steve Twinstra , owner of Twilight Acre Farms , had to decide whether to purchase a new combine or perform significant repairs on the existing machine . He realized that the decision needed to be made before the next harvesting season , but he was unsure of which option would fil best for the company WHEAT , GRAINS AND BEAN FARMING IN ONTARIO In Canada , the family farming industry had seen better days . According to Statistics Canada , the number of farms in Canada dropped by II per cent to a total of 246 923 farms between 1990 and 2001 . The rate of decline was even higher in Ontario at 15 per cent . " Lower profit margins in the industry necessitated higher isher acreage , increasing the average farm size by 10 per cent . Although small farms still made up two - thirds of all farms in Canada , almost half of farms with less than 525 090 in total revenue counted in th 1996 census had left farming by 2001 The farming industry relied heavily on weather conditions and was deeply affected by fluctuations in world commod commodity pricing . This volatility particularly affected smaller farming operations , Farming industry Tindustry products were commodities , so there was little room for differentiation If all farmers produced a quality 4LILLIES product , all produce would be sold however , the price for all armors could be lowered . If a clean quality reduct was not produced the farmer would receive a lower price There were , however , other forms of competition in the farming industry ; competition between local farmers for valuable , workable land to rent ; competition for contracts with buyers , and competition for custom work ( for example , combining crops of corn , soybeans or wheat , or cutting and baling fields of 15 , 20 0 Battling Foreign Wendy Reynard and Elizabeth Grasby Foxand Farms Richard Way School of Business , March 18 2004 202 Farm Subsidle CAC NEWS Canadian Broadcasting CorpoRichard Ivey School of Business The University of Western Ontario IVEY 9BOGBOOT TWILIGHT ACRE FARMS LIMITED Stephen Rene Fray prepared this case under the supervision of Professor Mary Heist solely to provide maternal for class discussion . The authors do not intend to frustrate either affective or meffective handling of a managenal situation . The authors may have disguised cortan names and offer identifying information to protect confidentiality confident they Management Services prohibits any form of reproduction storage or transmittal without it's written permission , Reproduction of thus maternal is not covered under authorization by any reproduction sights organization . To order copies of request permission to reproduce mationals contact way Publishing . Ney Management Services , Co Richard Ney School of Business . The University Westam Onfang , London Ontario Canada NGA 247 phone ( 519 / 681 - 3209 . fox ( 518 681 - 3982 - mal cases fivey own.ca Copyright O 2005 troy Management Services Version : (41 2005-12-03 In early January 2004 , Twilight Acre Farms , a mid -sized family - owned farm had just finished a season of arresting its 4 060 acres of land . At the end of the season , Steve Twinstra , owner of Twilight Acre Farms , had to decide whether to purchase a new combine or perform significant repairs on the existing machine . He realized that the decision needed to be made before the next harvesting season , but he was unsure of which option would fil best for the company WHEAT , GRAINS AND BEAN FARMING IN ONTARIO In Canada , the family farming industry had seen better days . According to Statistics Canada , the number of farms in Canada dropped by II per cent to a total of 246 923 farms between 1990 and 2001 . The rate of decline was even higher in Ontario at 15 per cent . " Lower profit margins in the industry necessitated higher isher acreage , increasing the average farm size by 10 per cent . Although small farms still made up two - thirds of all farms in Canada , almost half of farms with less than 525 090 in total revenue counted in th 1996 census had left farming by 2001 The farming industry relied heavily on weather conditions and was deeply affected by fluctuations in world commod commodity pricing . This volatility particularly affected smaller farming operations , Farming industry Tindustry products were commodities , so there was little room for differentiation If all farmers produced a quality 4LILLIES product , all produce would be sold however , the price for all armors could be lowered . If a clean quality reduct was not produced the farmer would receive a lower price There were , however , other forms of competition in the farming industry ; competition between local farmers for valuable , workable land to rent ; competition for contracts with buyers , and competition for custom work ( for example , combining crops of corn , soybeans or wheat , or cutting and baling fields of 15 , 20 0 Battling Foreign Wendy Reynard and Elizabeth Grasby Foxand Farms Richard Way School of Business , March 18 2004 202 Farm Subsidle CAC NEWS Canadian Broadcasting CorpoRichard Ivey School of Business The University of Western Ontario IVEY 9BOGBOOT TWILIGHT ACRE FARMS LIMITED Stephen Rene Fray prepared this case under the supervision of Professor Mary Heist solely to provide maternal for class discussion . The authors do not intend to frustrate either affective or meffective handling of a managenal situation . The authors may have disguised cortan names and offer identifying information to protect confidentiality confident they Management Services prohibits any form of reproduction storage or transmittal without it's written permission , Reproduction of thus maternal is not covered under authorization by any reproduction sights organization . To order copies of request permission to reproduce mationals contact way Publishing . Ney Management Services , Co Richard Ney School of Business . The University Westam Onfang , London Ontario Canada NGA 247 phone ( 519 / 681 - 3209 . fox ( 518 681 - 3982 - mal cases fivey own.ca Copyright O 2005 troy Management Services Version : (41 2005-12-03 In early January 2004 , Twilight Acre Farms , a mid -sized family - owned farm had just finished a season of arresting its 4 060 acres of land . At the end of the season , Steve Twinstra , owner of Twilight Acre Farms , had to decide whether to purchase a new combine or perform significant repairs on the existing machine . He realized that the decision needed to be made before the next harvesting season , but he was unsure of which option would fil best for the company WHEAT , GRAINS AND BEAN FARMING IN ONTARIO In Canada , the family farming industry had seen better days . According to Statistics Canada , the number of farms in Canada dropped by II per cent to a total of 246 923 farms between 1990 and 2001 . The rate of decline was even higher in Ontario at 15 per cent . " Lower profit margins in the industry necessitated higher isher acreage , increasing the average farm size by 10 per cent . Although small farms still made up two - thirds of all farms in Canada , almost half of farms with less than 525 090 in total revenue counted in th 1996 census had left farming by 2001 The farming industry relied heavily on weather conditions and was deeply affected by fluctuations in world commod commodity pricing . This volatility particularly affected smaller farming operations , Farming industry Tindustry products were commodities , so there was little room for differentiation If all farmers produced a quality 4LILLIES product , all produce would be sold however , the price for all armors could be lowered . If a clean quality reduct was not produced the farmer would receive a lower price There were , however , other forms of competition in the farming industry ; competition between local farmers for valuable , workable land to rent ; competition for contracts with buyers , and competition for custom work ( for example , combining crops of corn , soybeans or wheat , or cutting and baling fields of 15 , 20 0 Battling Foreign Wendy Reynard and Elizabeth Grasby Foxand Farms Richard Way School of Business , March 18 2004 202 Farm Subsidle CAC NEWS Canadian Broadcasting Corpolight Acres hay ) " In most regions , the farming community was socially close - knit . Reputation and integrity were well respected attributes TWILIGHT ACRE FARMS Twilight Acre Farms Limited was a family - run farming operation , started in 1961 by Peter and Dini Twynstra . Despite taking over the farm in 1989 from his parents , Steve Twynstra had been directly involved in his parent's business si nee 1988 . Before joining the family operation , he completed a bachelor's degree in agricultural economics at the University of Guelph and a masters in finance from Purdue University Twilight Acre Farms primarily planted harvested and sold wheat beans and com . When there was excess apacity , Twilight Acres would take on custom work for other farmers in the community . Twilight Acres worked 4 090 acres of land of land each year , although it owned approximately only 1 200 acres , The rest of land was rented on long-term leases CURRENT ISSUE At the end of the 2003 harvesting ing season , I wynstra noted that one of his two combines required significant repairs . He was unsure of whether other to repair the existing machine or to replace it with a new machine . I felt that he shout could make the decision as soon as possible so that he would have the deal negotiated an losed well before next year's harvesting . Existing Machin Twynstra was using a Caseit 2306 with a 25 - foot grain head . He had bought the machine in 1999 , and had just completed the payments for the machine . He estimated the existing machine required repairs of 600 immediately and $10900 in the second year . In addition to the major repairs . Twynstra recognized that combines typically required about $4 000 per year of maintenance . He also felt that aft another four years . the Casell 2360 would no longer be functional and he would need to invest in new machinery at that time . After the four years , he assumed he would get $75 090 as a trade- in valu New Machine [wynstra was also considering buying a new Casei1 238 8. He planned to put the existing 29 -foot grain head on the machine even though it did have the capability to support a 30 - foo 30 - foot grain head The new machine's cost was $267 009 , but the dealer offered a S152 090 trade - in value for the older machine . Twinsira would be forced to finance the rest of the purchase through a bank or through the Farm the Fa Credit Corporation . He had been offered a S . per cent financing rate over a four year term . The expected payments were S16 347 with two payments per year . At the end of the four years . Iwynstra would own the machine farming equipment was so expensive . some farmers opted to hire other farmers to plant and or harvest the crops for themlight Acres hay ) " In most regions , the farming community was socially close - knit . Reputation and integrity were well respected attributes TWILIGHT ACRE FARMS Twilight Acre Farms Limited was a family - run farming operation , started in 1961 by Peter and Dini Twynstra . Despite taking over the farm in 1989 from his parents , Steve Twynstra had been directly involved in his parent's business si nee 1988 . Before joining the family operation , he completed a bachelor's degree in agricultural economics at the University of Guelph and a masters in finance from Purdue University Twilight Acre Farms primarily planted harvested and sold wheat beans and com . When there was excess apacity , Twilight Acres would take on custom work for other farmers in the community . Twilight Acres worked 4 090 acres of land of land each year , although it owned approximately only 1 200 acres , The rest of land was rented on long-term leases CURRENT ISSUE At the end of the 2003 harvesting ing season , I wynstra noted that one of his two combines required significant repairs . He was unsure of whether other to repair the existing machine or to replace it with a new machine . I felt that he shout could make the decision as soon as possible so that he would have the deal negotiated an losed well before next year's harvesting . Existing Machin Twynstra was using a Caseit 2306 with a 25 - foot grain head . He had bought the machine in 1999 , and had just completed the payments for the machine . He estimated the existing machine required repairs of 600 immediately and $10900 in the second year . In addition to the major repairs . Twynstra recognized that combines typically required about $4 000 per year of maintenance . He also felt that aft another four years . the Casell 2360 would no longer be functional and he would need to invest in new machinery at that time . After the four years , he assumed he would get $75 090 as a trade- in valu New Machine [wynstra was also considering buying a new Casei1 238 8. He planned to put the existing 29 -foot grain head on the machine even though it did have the capability to support a 30 - foo 30 - foot grain head The new machine's cost was $267 009 , but the dealer offered a S152 090 trade - in value for the older machine . Twinsira would be forced to finance the rest of the purchase through a bank or through the Farm the Fa Credit Corporation . He had been offered a S . per cent financing rate over a four year term . The expected payments were S16 347 with two payments per year . At the end of the four years . Iwynstra would own the machine farming equipment was so expensive . some farmers opted to hire other farmers to plant and or harvest the crops for them