‘Time to cut back on farm machinery spending’
UK farmers are spending too much on their tractors, combines, cultivators and otherequipment,anindustry expert has claimed.
And with machinery costs accounting for the largest spend in growing a tonne of wheat – often accounting for between 25 and 30 per cent of the total – expenditure in this area is ripe for a “serious prebrexit review” according to the Agricultural and Horticultural Development Board’s Harry Henderson.
Involved in a monitor farm project looking at machinery and labour costs across 21 farms, Henderson said that although there was a huge variation between units, the key finding was that machinery costs were too high.
“There are growers using very high capacity machinery and not getting the return on expenditure in either reduced labour hours, costs or higher yields,” he said. “Make no mistake; machinery is priced on the output it is capable of.”
Henderson, a knowledge exchange manager with the board, said that annual machinery and labour costs ranged from £288 to £593/ha per hectare across the farms, which ranged from 97 to 1,278 hectares.
But he said that the most surprising revelation was the fact that there was no correlation between farm size and the efficiency with which machinery was used – meaning economies of scale were not being realised.
“Some of the smallest farm businesses also ran the lowest costs and a few of the larger units incurred the highest costs per hectare. This means the common idea that scale helps to spread costs does not always ring true.”
He said that while many farmers were keen to have extra drilling or harvesting capacity, farmers needed to look at this policy in terms of cost to their businesses.
Heavier, larger machines could also lead to deep compaction and damage to the soil which could take years to correct, and additional damage often occurred when larger machines were operated in questionable conditions.
“Although we don’t know what the new domestic agricultural policy will look like, there’s no doubt that rural payments will be less.”
Henderson said that the first step for farmers was to review their tractor usage and to keep what they already had for longer.
“Sure, trade-in values will be lower, but the cost of keeping machinery for longer is still lower than early replacement,” he said. “In the longer term, a planned replacement policy, a review of the whole system and appropriate machinery care responsibilities placed with the operator are all important factors.”
He advised: “Work with your dealer and remember that a special deal is unlikely to be the last: trade-in when you are ready.”
He also said that farmers should also use the AHDB’S Farmbench farm costing platform to help assess their machinery and business costs.