OMAHA (DTN) -- Farmers and ranchers need smart equipment strategies when purchasing agricultural equipment. Consider various factors when buying new or used equipment or even considering hiring custom work, according to a recent press release from Oklahoma State University Extension.
Roger Sahs, an Oklahoma State University (OSU) Extension agricultural economics specialist, said the best way to determine which path to go is to keep good production and financial records. When comparing new to older equipment, consider cost minimization.
"There are producers out there who are over-mechanized and have unproductive debt," Sahs said in the OSU release. "They could get by with less. They're spending too much money on owning a piece of machinery, new or used, as opposed to hiring a custom operator, which may be the least-cost option."
Precision agriculture technology allows more accurate fieldwork; new implements with this technology can address those needs. However, equipment can also be retrofitted with fewer expenses if producers with smaller operations have the time and skills to make repairs themselves.
Sahs said farmers and ranchers don't realize how much money they have in their equipment and how much it costs them on a per acre or per hour basis.
"They need to record costs, then compare those to custom farm and ranch rates," he said. "That will help them decide if it's better to own and operate that machine or get the job done cheaper with a custom operator."
OSU Extension has a couple different publications to help producers with machinery ownership questions.
The Oklahoma Farm and Ranch Custom Rates fact sheet provides information on custom harvest costs. This can be found at https://extension.okstate.edu/….
The Machinery Ownership versus Custom Harvest fact sheet also offers some insight on how to determine equipment needs. This can be found at https://extension.okstate.edu/….
LASTING IMPACT OF PANDEMIC
The COVID-19 pandemic is still having negative lasting effects on the farm equipment industry.
At the beginning of the pandemic in 2020, the value of used farm equipment skyrocketed as demand increased. Farm sales, estate sales and private treaty transactions became places people turned to for a good deal on equipment, according to Gregg Pickens, owner of Pickens Auctions.
During the last couple of years, the size of auction crowds, both in-person and online, has increased significantly.
"At an estate auction in Oklahoma this spring featuring mid-size farm and ranch equipment, a tractor with 1,100 hours in excellent shape brought more used than it did when the family bought it brand new," Pickens said.
Among the items at the top of buyers' lists: four-wheel drive tractors between 15 to 20 years old with less technology and few diesel exhaust fluid requirements. Tractors like this sold at Oklahoma auctions and have been shipped to states such as Minnesota and Pennsylvania, Pickens said.
Farm equipment dealerships are still low on inventory, both for new and used farm machinery.
Seth Kline, site manager for P&K Equipment located in Stillwater, Oklahoma, said two or three years ago they could place an order for new machinery and have certain models relatively quickly. Now, you can't even place orders for some product lines, while other models are still six months out, he explained.
"Demand is still high, everything coming in is going right out," Kline said. "We don't have the luxury of having a lot of stock to choose from, but if we don't have it here, we may have it somewhere else."
Kline said the advantages of buying new equipment versus used equipment include favorable financing rates, availability of parts for newer models, and warranties are guaranteed with repairs performed by certified technicians.
Russ Quinn can be reached at Russ.Quinn@dtn.com
Follow him on Twitter @RussQuinnDTN
(c) Copyright 2022 DTN, LLC. All rights reserved.