The good news is there are deals to be had on both new and used farm equipment out there, says Matt Clark, senior rural economic analyst with Terrain. The bad news is why there may be deals to be found. (Hello, tough times!)
There are, however, ratios between gross margin, costs per acre, and more, that can serve as guideposts on deciding if a tractor purchase is inline or out of whack for your farm — a kind of “Moneyball” approach to making equipment decisions.
In this video interview recorded at Top Producer Summit in Kansas City in late February, RealAg Radio host Shaun Haney asks Clark to lay out the numbers he suggests farmers use when assessing the relative cost of machinery, and how that number may change based on the balance sheet or type of operation.
There are some realities, Clark says, as a more diversified farm may have higher overall equipment needs, but using the gross margin for wheat or corn as a guide can be helpful.
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