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Re: How can farmers justify to purchase new tractors ?


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Posted by FC Andy on July 08, 2015 at 13:59:48 from (74.126.84.52):

In Reply to: How can farmers justify to purchase new tractors ? posted by crackerjack on July 08, 2015 at 07:49:42:

Interesting subject, I was just talking about this with a retired farmer the other day. He told me a little about his scenario, but I don't know any numbers or acreages. He was full on farming in the 80's and 90's. His strategy was buying used equipment that needed a rebuild and was too big for the smaller farmer, but too old for the big farmer. Think 12 row planters and 4wd tractors. He rebuilt it, then often had 2 of everything "just in case", and thought he was farming cheaper than everybody else. A good friend of his that he "ran with" bought new, large equipment. They compared their machinery costs per acre, and it was "closer than you'd expect". Within a few dollars. The guy I know would have had more direct write-offs, while the other had longer-term depreciation. So, for a guy covering some ground, "making a living" farming, I'll bet he can justify it in his mind to own new or like new/ used, and with the bonus depreciation, well, it makes sense to me. I farm too small to fully understand the decisions and economics of the situation, however. The last two years my maintenance bills and repairs to my machinery is over half of my gross income from farming, so in a way it makes some sense to me to buy new if you can swing it. Just my $.02 -Andy


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