Shiny new equipment is a drain on farm resources

Farmers are spending too much on their machinery – and the likely removal of area support post-B rexit will prompt an indus - try-wide re-think on how such costs can be better deployed, including working machines harder and keeping them longer.

While it might not be music to the ears of machinery dealer shoping to fill their order books on the basis of interest expressed at the Highland Show, two major projects are currently under way to help farmers take better control of expenditure in this area.

And the revelation that more than half of the total costs associated with growing a crop of wheat could be swallowed up by machinery, fuel and labour costs has led to the setting up of benchmarking initiatives to help farmers identify accurately where their spending is going.

An investigation currently underway by the Agricultural and Horticultural Development Board (AHDB) found that growers were spending too much on their machinery – accounting on average for 25–30 per cent of a farm’s wheat growing cost.

Project leader Harry Henderson said that Britain’s impending departure from the EU would heighten the pressure on farms to streamline costs – and that undertaking a review of this major component of a farm’s costs could help growers identify where they could make savings.

The review by members of the monitor farm project looked at purchase price, number of years of ownership, estimated value at sale and depreciation, as well as running costs. Henderson said that while many of the best performing farms had the lowest machinery and power costs, it wasn’t only about spending as little as possible: “This could mean exposing your business to possible machinery breakdowns,” he warned – adding that by having a grasp of what equipment was costing the farm it was possible to weigh the potential benefits of using contractors or adjusting systems.

He was also critical of farmers’ constant desire to buy new kit. “Keeping a piece of equipment on farm over a longer period could dramatically reduce its running cost per hour,” he said. “Trade -in values will be lower, but the cost of keeping machinery for longer is still lower than early replacement.”

However, across the longer term, he said a planned replacement policy with periodic reviews of the whole system and appropriate care and servicing were important factors.

Eric Anderson, senior agronomist with Scottish Agronomy, said: “Figures show that with the loss of BPS payments, 40 per cent of wheat-growing land – and 60 per cent of land for other combinable crops and potatoes–will not yield enough to cover actual production costs.”