Reducing Farm Equipment Costs with Verge
Maximize every acre with Launch Pad’s FarmTech Solution
Farm equipment is a big-money battle.
Despite some farm costs declining steadily over the past 5-10 years, equipment costs (new and used purchase, lease, and repairs) has only increased. How does today’s modern operation maximize returns on one of the most vital (and expensive) pieces of the agricultural equation?
The Growing Costs of Iron
Farm equipment per-acre costs went up as much as 7.9% between 2017 and 2019, and continue to climb. Based on multi-year trends, costs on equipment have climbed at faster rates than other farm expenses, and in many cases exceeding them. In 2013 and 2014, average seed costs out-paced equipment, with fertilizer costing 50% more per acre. However, since that time, seed, fertilizer, and chemical costs dropped over $50 per acre by 2017, largely driven by the decline in potash prices.
Currently, farm equipment costs are higher than seed and pesticide inputs, making up 14% of the total operating expenses of the average Canadian oilseeds and grain farm. According to data from the USDA Economic Research Service, when combined with the costs of fuel and lube, machinery expenses outpace all other production costs on corn, including opportunity costs on land. That same data also shows machinery costs increasing a whopping 86% between 1999 and 2019.
Meanwhile, the dealer outlook doesn’t see price escalation changing anytime soon. According to industry sources, 60% of dealers expected to see 2020 prices grow by at least 3%, with nearly one-third of those surveyed expecting a 4-6% increase.
Compacting this problem is the growing cost of repairs, estimated in some cases at 2.6% of investment cost, running around $10 per acre. Newer equipment also comes with the added expense of some specialist-only repairs, which has led some farmers to abandon new equipment altogether in search of more repair-friendly solutions.
Getting the Most from a Big Expense
Farm equipment only gets more expensive and less productive over its lifespan, but that doesn’t change the simple fact that it is still an essential part of any operation. The only way to truly capitalize on the equipment dollars spent is to ensure that machines are operated less, while still farming the same (or more) acres.
At Verge, we’ve proven that our precision agriculture tools allow more profitability from farm equipment, with fewer costs. Through proper path planning, benchmarking and optimized in-field operations, Launch Pad allows farmers to accumulate fewer hours and fewer miles on equipment, reducing overall spending on fuel, wear and tear, and repairs. By eliminating unnecessary passes and movement, our tools extend the lifespan and reduce the cost of farm equipment.
Even a decade ago that would have seemed impossible, however with precision farmtech tools like Launch Pad, it is now a reality for any expanding farm operation.
Launch Pad uses historical data stored in equipment GPS systems to create fully optimized guidance lines that eliminate any unnecessary field movements, which in turn reduces the number of running hours, fuel costs, wear and tear, and repair costs. It allows you to do more with your equipment with fewer costs.
Maximize your Equipment with Verge
At Verge, our products simplify farm planning to reduce infield decision making, which means that every move that is made is reflected on a farmers bottom line. Our farmtech solutions are aimed at increasing the machine utilization rate, resulting in an increase in overall productivity across the entire farm. If you’re interested in learning about how we can get the most out of your equipment, book a demo, see what Launch Pad can do, or sign up today.