Adversity is part of agriculture. Someone commented recently that every farmer can tell you a story about “that year” in their history, and for many, it’s more than one.
It’s clear that 2020 is one of those years with challenge after challenge hammering away at society — and frankly, your farm.
But you keep moving forward. And even with seven years of soft prices, to stay in business you must keep equipment running. For many that means the repair bills are starting to pile up.
As you read this, you may be in decision-making mode for the winter — overhaul or replace. In the past in this column, I’ve discussed the business approach of a capital purchase plan.
That plan is designed to guide logical replacement of equipment, or large repairs: to balance your investment in iron with your cash flow and overall profit.
We know farming today is easier with the right equipment, and having a plan can help — even when it appears the financing is tight.
Repair or replace?
Many farmers are looking at the decision to repair or replace any piece of equipment on the farm. Tillage tools with wear parts can usually be kept in shape over the winter with some targeted investment, though there are newer hybrid tillage tools on the market that give you fall and spring options for seedbed preparation.
Planters are a challenge, because there are new machines that can help you pick up the pace. Yet a solid planter toolbar with some new high-end row units can help you boost speed and efficiency, too. The key here is putting a pencil to the cost of those new row units versus a whole new rig.
Tractors and combines are the big pieces of machinery in the shed — and here the repair-or-replace question is a little more difficult.
For tractors, you can do a lot to keep them running. An older machine may lack some creature comforts, but if it has the horsepower to do the work with the implements you have, this is where many are stretching their dollars.
However, rising fluid efficiency of newer machines, combined with higher power levels to move equipment through the field faster, makes newer tractors more attractive. And if you’ve purchased a new high-speed planter, you may need more power to maximize it.
The focus should be on machinery cost per acre (including all repair costs), not the total cost of the machine. If a newer piece of equipment can cover more acres in a day, that’s value to pencil in, too.
The logistics of it all
Your machinery options have never been more varied. Updating or upgrading existing machines may make sense for your operation — while a single new purchase could cause a ripple effect across the business.
For example, a high-speed planter can boost productivity, provided you have a tractor large enough to pull it at top speed. The faster you need to go with one of these newfangled electric meter planters, the more tractor horsepower you need. But then you have to know if you can tend that faster planter to keep it moving.
The key is maximizing your equipment investment. A new, larger piece of equipment should perform as close to 100% as possible; but if support tools are not up to snuff, you’re not making the most of the investment.
A comprehensive look at your current equipment and total needs for the farm may be worth the time this winter ahead of the 2021 season.