What Equipment Do You REALLY Need?

Old John Deere

One of the things I struggle with the most, and I suspect that I am not alone, is how much equipment I actually need, and what. Of course I want a shiny, new, bright green, John Deere tractor, but does that make sense? I also want a big, crew cab, F350 dually, but do I need one? The answer in most cases is no, and you probably don’t either. I know, the little boy in me weeps, but my pocketbook, and the ranch’s bottom line thanks me.

But in reality, you need something, right? The answer is a definite maybe. What you really need, and not just want you want, ┬áis going to depend on your operation. If your farm includes row crops of some sort, or a market garden, chances are you’re going to want some type of tractor with the appropriate attachments. Tilling enough ground to plant an adequate crop by hand, while noble, is not realistic.

If you’re running cattle, you probably actually need very little in the way of machinery. Chances are you’re not going to be hauling your animals to the abattoir yourself, unless you’ve just got one or two animals. If you ranch in a harsher winter climate, you may need a means to move hay to feed the animals when the snow gets too deep. While small square bales are feasible to move around manually, chances are you’ve got a stock of round bales. I don’t know about you, but aside from a tractor, I don’t know how to move a half ton bale of hay from the shed to the pasture.

I have seen a lot of people talking about buying their own haying set up. Out here, we don’t produce enough hay for that to make sense. This year we harvested about 50 tons of what is essentially meadow grass in one cut. Could we put in the effort to replant, water and shoot for two cuts, perhaps, but we’ve decided that is not the most effective way to utilize our land. Life is much easier working a crop share agreement with a fellow rancher that already has the equipment. You will have to decide for yourself if you really want to get all the toys or not.

When it comes to equipment ask yourself two questions:

  1. Does this equipment generate income? Which is to say, does it increase productivity enough, and increase yields enough, save time enough, to offset the costs?
  2. What is the opportunity cost of your equipment? What I am getting at here is could you spend $10,000 and get a well maintained used tractor that will suit your needs instead of a newer tractor for $20,000 or $30,000? What could you do with that extra cash? For example, would it make more sense to increase your herd or invest in your marketing efforts?

Whatever route you choose to go, keep in mind that equipment requires upkeep. Tractors require maintenance, fuel, repairs, etc. And in the case of something you’ve financed, it also requires interest payments on top of your capital. For me, at least for now, I prefer to only buy what I can pay for out right. That means a used tractor, an older truck, and the likes.

Have you sat down and thought about what pieces of equipment you actually need, what it costs, and if something less expensive would do the same job?

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