The logic of bigger is better with ag machinery comes with operational and economic considerations. Farmers have to weigh the efficiency of covering more acres with the cost of purchasing larger equipment.
So at what point will ag machinery outgrow its investment value?
It may be sooner that you think, says Cambridge, Ill., farmer Monte Bottens, who suggests that the advancements in equipment automation and robotics could change the equipment purchasing model.
Bottens was part of a farmer panel that participated in Ag Equipment Intelligence’s 2020 Executive Briefing virtual summit. He shared his thought process on a movement toward farming as a service and away from the traditional buying a trading of large ag equipment.
“As a farmer, I look at how much loss and depreciation I get. It's really getting to a point where it isn't worth it. Can we have robotic harvesters, robotic planting equipment come in and we pay. When I look at pricing out to lease a tractor right now, $33,000 a year for 450 hours. I look at the number of acres it's going to run over, and it's like, "Huh, that's $16, $15 an acre. That's $15 an acre, now I got to put an implement on that kind of stuff. Can I go ahead and just pay a service to come in, $35 an acre, plant my crops and done and robotic. I think that's the way we’ve got to look at it, is farmers don't need to buy a tractor. Farmer needs a crop. OK, so we’ve got to think about the end goal. I know on healthy soil, I'll like maximized yield with maximized profit. OK, if I have to buy a tractor today to do it, I'll buy that tractor. Tomorrow, if I don't have buy that tractor, and I can just lease or hire, or rent somebody to do that, that requires less capital and less of a balance sheet.”
You can learn more about the 2020 Executive Briefing and how to access archived recordings from the virtual event at AgEquipmentIntelligence.com.