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Four Tips Before You Re-Tool Equipment Lineup

Farm machinery costs continue to consume a larger chunk of overall production expenses - in some regions more than 50% of total production costs.

Machinery costs are calculated assuming that new equipment is purchased and held for 10 years - seven years for combines. Higher equipment prices contribute to higher depreciation and interest costs. University of Illinois ag economist Dale Lattz notes that combining is the single machinery operation that contributes the most to machinery costs per acre.

If it’s time to evaluate if your machinery is "pulling its weight" consider these tips:

• Match equipment size to operation. If a farm has four tractors when it may only need three, it drives up costs per acre on that farm, explains University of Illinois farm management specialist Gary Schnitkey. If you have a tractor that is getting less than 300 hours of use per year, you need to question whether that tractor is really needed.

• Record repair costs. Often time repair costs are higher than people realize if accurate records aren't kept. Doug Jose, University of Nebraska-Lincoln extension farm management specialist, recommends keeping records of exact repair costs. It will make evaluation time eas-ier when making future decisions and determining whether the particular machinery was worth the cost.

• Consider custom hiring. Often times custom hiring is cheaper than owning machines. Many universities offer spreadsheets comparing custom costs vs. owning, Jose says.

• Evaluate advantages of new equipment. If you just need inexpensive horsepower, you can still find great buys in the used machinery market, states Dan Ess, agricultural systems management specialist at Purdue University. However, "there are technological advances that certainly make new equipment more attractive." Some of these advances increase field capac-ity through larger boom widths and increase control in sprayers and improved seed handling for larger planters. Other new technologies make for a more comfortable, less fatiguing ride inside the cab.