The Rural Voice, 1979-11, Page 8initially at $35, allow farmers to make sprayer calculations,
estimates of soil erosion on corn fields, animal science
calculations and combine ownership versus custom hire
calculations.
These programs must be purchased separately from the
calculator. Kent Percival warns the drawback to the calculator is
that the programs were designed in the United States and so
some calculations may require a change in numbers to fit our
situations.
Northeast Regional Agricultural Engineering Services, based
at Cornell University, have also issued a number of programs
using the same calculator. These include selecting farm
machinery, comparing repair costs and using work sheets that
allow you to go through the same kind of calculations to come up
with a final per acre cost of operating the equipment.
This service costs $20 a subscription.
Mr. Percival said once a farmer gets on to the calculator, he
can sit down himself and plan differnt strategies, using
calculations for different machinery makes and sizes.
In case the calculator seems far-fetched for practical work, a
number of larger farm operators have already made the move to
on farm computers for bookeeping and decision-making.
Gary Hutchison, of the Office of Continuing Education at
OAC, also has some suggestions to consider in deciding whether
to purchase new versus used equipment. Mr. Hutchinson
designed the agricultural economics course in the independent
studies program at the college and also farms himself.
Mr. Hutchison said one thing affecting machinery decisions is
the "awful gap between the haves and the have-nots" or
between the farmers with an income putting them in the 50 per
cent tax bracket and the farmers just starting up or working
smaller operations.
Mr. Hutchison said when he was with the Farm Credit
Corporation, "too much machinery killed more young farmers
than anything else." He added if anyone benefits from buying
used rather than new equipment, it's likely the beginning
farmer.
TAX SAVINGS
Gary Hutchison emphasizes when buying used machinery, the
farmer should remember he's losing out on the tax credit and the
capital c ost allowances, both major factors to consider. On an
$80,000 combine, these can mean hefty savings. It also helps
explain why farmers in higher tax brackets can turn over new
equipment almost every year.
He also points out if a farmer decides to lease rather than buy
equipment, then it's the dealer who reaps the benefit of the
investment tax credit. He said if a farmer were in the 50 per cent
bracket for example, he would be better owning the equipment
than leasing it.
NUISANCE FACTOR
The other consideration faced by farmers is whether to buy his
machinery or custom hire the work done on his farm. Gary
Huchison, who custom hires much of the work on his own farm,
said one factor is what he calls the "nuisance factor" - that 's the
problem of moving and storing equipment you purchase around
the farm. Sometimes constantly moving the equipment proves
more nuisance than it's worth!
"Timeliness" is also a consideration in hiring the custom
operator. For example, custom operators are usually set up to do
what they think they can handle under average conditions. Often
weather or other factors interfere with this schedule, and the
farmer's crop may be left sitting in the field much longer than
he'd planned.
This example below of ownership versus custom hire is a
sample Mr. Hutchison prepared for his students and gives an
idea of the calculations needed in making decisions on machinery
use on the farm.
COMBINING
Ownership - small used self
propelled combine $3,000.
Deptreciation 10% = 300
Repair 5% = 150
Insurance 40c/$100 = 12
Interest 3000/2 x 11% = 165
Operating Costs 40
Total Yearly Cost on
37 Acres $667
Custom
$50 Per hour with 6600 J.D.
Actual Cost 8.5 hours/11.50/
acre = $425.
including skilled labour
and grain wagons.
Used equipment business
booming, dealer says
BY ALICE GIBB
Ralph Shantz can look at a piece of used farm equipment,
decide whether or not it's worth salvaging and estimate how
much it's worth on the open market.
Mr. Shantz, who lives outside the village of Alma, north of
Guelph, started selling used farm equipment about 27 years ago
as an extra source of income to supplement his farm earnings.
Today the growing demand for good, used equipment has turned
the once part-time interest into a fulltime business which
employs an average of 10 employees year round.
With inflation continuing to rear its ugly head and with land
prices and otherfarm costs skyrocketing, the demand for used
equipment is growing steadily. As Ralph Shantz says, "There
always has been and there always will be a market for good used
equipment." The rationale behind the statement is simple
PG. 6 THE RURAL VOICE/NOVEMBER 1979
-people ouy used equipment because they can alfurd the
new."
The Shantz equipment lot, which sits on the crest of a hill three
miles north of Alma, is an impressive sight. There are row on
row of reconditioned combines, tractors, balers and a full line of
tillage and planting equipment, and most of the machines are
field ready. Touring the lot is a little like wandering into a giant
farm auction.
WHO BUYS?
Who are the farmers buying used equipment these days?
Ralph Shantz says many of the customers are younger farm
operators, just getting started, or else operators of smaller
farms. Cash crop farmers these days, he says, are likely to opt
for new equipment.
According to the dealer, used equipment today can be