Young Farmers and the Rising Cost of Machinery.

When it comes to farming, one of the most important pieces to the puzzle, besides a piece of ground, is farm equipment.  Farm equipment comes in many different types, colors, brands, and sizes.  What most people do not understand though, is just how expensive machinery actually is to purchase and maintain.  However, it is even more challenging for young farmers, or start-up farmers, to purchase farm machinery. This is even more true over the past several years especially.  This is because the price of new machinery in extremely high, costing anywhere from $100,000 to $300,000+ per tractor, along with a tillage tool to prepare a seedbed, a planter to plant the seed, and possibly a combine to harvest the crop.  While it seems to me everyone likes new things, sometimes it is the older things that get you to where you need to be.

However, there are ways to avoid these high prices and that is to buy used.  While sometimes used equipment is still expensive, if you have a good eye for quality pieces you can find extraordinary deals on farm equipment.  I have been to many consignment auctions over the past several years trying to build up my farm equipment inventory and succeeding for a reasonable price.  I also know several other young farmers who have also been doing the same thing recently.  Auctions are an excellent way to purchase machinery for young farmers because you don’t need to have much capital to purchase a quality piece of machinery.  It allows you to check out the equipment before you decide to bid on it and try to purchase.  The only down fall to purchasing used equipment at auction is that you never know what you are going to get, good or bad, but that happens with anything purchased used.  Auctions usually keep data on what items sell for as well.  This is a good source for checking what the market is doing with certain equipment.  A reputable source I have found that compiles data from these auctions is Machinery Pete.  He does a good job of keeping up with auctions and pricing data which I why I check out what he has to say, and check the data before purchasing equipment.  He also has his own blog and video series which are very helpful.  Another tool I use when looking for machinery is classified ads, whether it be the TractorHouse publications (online or magazines), Craigslist, Machinery Finder, or even other local sources, I can usually find a good deal on something I am interested in.  With these sources you have to be resourceful and check-out the seller because sometimes you can get an even better deal than what they have listed.

7710
This is one of the pieces of equipment I purchased at an auction.

Other issues with new or newer equipment is what it costs to maintain or repair it.  While most brand new pieces of equipment are sold with warranties and other maintenance plans it still doesn’t always help the farmer when they have to wait for a technician to come fix it so that they can get back to work.  This is another reason I vouch for older used machinery, because in general I find it easier, and sometime cheaper to maintain and repair them.  While not every person is mechanically inclined enough to fix their piece of machinery when it breaks down, they do not have to have any specialty software or tools to fix it in general.  The hardest part I have found about owning and operating older machinery is the availability of quality parts.  This is because the manufactures are no-longer producing replacement parts for the older machines.  While aftermarket manufactures of parts are out there, it can still be difficult to find certain parts quickly and cheaply.

Even though used machinery has its side effects, just like everything else, I still find it to be a better deal than purchasing brand-new equipment, and I am not the only one who believes this. When talking with a fellow young farmer, Tyler Wilson of Murrayville, IL, he said this, “Our farm purchases only used equipment because we find it works just as good as new equipment, and it increases our profit margin due to reduced costs.”  Over the past several years I have noticed an increase in prices of good quality older tractors, which is still making it harder for young farmers to get into farming easily.  Grain markets and land rent prices also drive the prices of equipment.  This past year has been good for purchasing, if you have enough capital to do so, because of the low grain prices and high land rent rates.  This is where the young farmer needs to become savvy when buying and selling, because others will be selling equipment to pay bills, which makes for an excellent buying opportunity.

If I had some pieces of advice for a fellow young farmer when it comes to equipment it would be, do your research before buying, do not be afraid to take a chance but know your limits, and learn how to maintain your equipment yourself. With these keys you should be able to handle any situation when it comes to your equipment.

profile

I am Sam Woodrow, a Senior at Western Illinois University from Green Valley, Illinois.  I also am a 2014 graduate of Illinois Central College where I studied diesel mechanics.  Now at Western, I am pursuing a Bachelors’ degree in Agriculture Business with a minor in Agriculture Technology.  Machinery has always been a passion of mine ever since I was a young boy.  On our farm, I do most of the maintenance and repairs to our equipment when I am not at school.  I always look forward to helping other farmer with their machinery when they need it, as it is an important piece to the puzzle.

Advertisements

4 thoughts on “Young Farmers and the Rising Cost of Machinery.

  1. mfd95

    Great advice on buying used equipment for those who are going to be staring their own farm/business. I agree the price of equipment is not affordable for newly graduates or those who have been in the industry for years. Never thought about looking at some of the classified ads you listed to buy used equipment.

    Like

  2. willtaylor34

    Sam, what an informative article about the challenges of purchasing machinery. You bring up many great points. People that have a mechanical savy can certainly navigate through a high economic time to be purchasing farm machinery. I hope that you are able to continue building your farm machinery in the coming years. Best of luck!

    Like

  3. Tyler Lentz

    Very good point of view on the farming world. Most people think that land is the limiting factor, but machinery can be just as expensive too. I appreciate the fact that at your age you have the diligence not only to buy used equipment, but to be patient and resourceful in doing so. Good point of view from first hand experience.

    Like

  4. mjhouston

    Sam, very good points made throughout your whole article made me think of my own family farm and neighbors surrounding me. I have noticed many farmers around my area that used to buy new equipment every year have stopped doing so in just the past 3-5 years. I think with a new generation of farmers coming in that are much younger, they have to look past the new and shiny, and realize that used equipment does the same job.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s