In the agricultural world, your equipment is everything. Knowing you’ve got the horsepower behind you to farm efficiently and profitably is a big part of setting up a business. Indeed, some people can even go overboard in ensuring they have everything they need, especially in terms of vehicles.
Now, this can be a huge mistake. The amount of farm equipment you’re using is going to be a key factor in determining how much capital is going towards your machinery – it’s why so many experts recommend using a skeleton crew.
However, before you axe off various vehicles in the hopes of getting your money back, let’s walk through the true cost of maintaining agricultural equipment, and whether or not you’re forking out too much.
Finding a Good Deal
Even just trying to find the right price when searching for agricultural vehicles can be more than you bargained for. After all, you need to find the right vehicle type, age, mileage, and fuel capacity, and that can take a lot of time and money in itself.
This is clear in the industry number: in 2019 alone in the UK, almost £2 billion was spent on farming equipment, including vehicles, and the cost has only risen since. Even just an automated plough can cost up to £30,000, on average, depending on the specific side of the sector you’re in.
The Running Costs
The running costs of maintaining agricultural equipment can be huge, especially when you’re dealing with vehicle costs on top of this; fueling such a large vehicle can put a huge dent in your current profits, especially if you’re using over 100 liters per hectare. Then we have to mention: getting an older or broken down vehicle repaired can be commonplace in an agricultural business.
Indeed, it’s why there are dedicated services such as mobile trailer repair, and knowing which ones are worth the service costs is all in how negotiable they are. If you’re a local, for example, you could make a deal in the same way a company negotiates lower prices from their main supplier. Keep this in mind for your farm.
Dealing with Age
Of course, the older your vehicles, and the longer you keep them, the more they are going to depreciate in value. As a result, the longer you’re in ownership of something like a tractor or harvester, the harder it’s going to be to make your money back on it.
Sure, it’s cheaper to hold onto a vehicle than replace it every few years, but you’re going to need to put a proper plan in place for selling the equipment you use, and then buying a replacement.
Maintaining agricultural vehicles could be costing you far more than they need to. Make sure you’re consistently evaluating how much machinery is in your inventory, whether or not you need it, and don’t be afraid to cut back in certain areas. A financial review is just as important for your sector as any other!
