Acquiring farming equipment and machinery for your farm will likely take up a big chunk of your operating expenses. Farming machinery is a big investment, and getting the right equipment at the right price can be tricky.
There will be many factors you must consider when acquiring farming machinery. You likely will spend time assessing which equipment you need and how it will contribute to your crop and profits. If you feel it will be worth it, you will then need to compare different machine styles and brands. But before you can make your final decision you have a choice to make.
How will you acquire this equipment? Will you purchase or lease your new machinery?
There is no right or wrong answer to how you choose to purchase or lease your equipment. Both options come with pros and cons for the operation of your farm. Let’s compare further.
Purchasing farm machinery
If you decide to purchase your new farming equipment outright through Machinery Link or other resources, you are in line with what many farmers choose to do. This is likely because farm machinery is used frequently enough that most farmers deem it a worthy investment. Plus it’s nice to have ownership over what you are spending your money on.
For a machine you know you will use often for years to come, it will likely be more cost-effective in the long run to purchase your machinery and it will help build equity.
If you cannot pay cash for your equipment many farmers choose to finance their purchase of equipment. In addition to the cost of the equipment itself, you should also consider the cost of ongoing maintenance and insurance that you will also be responsible for paying for.
Leasing farm machinery
What about leasing it instead? This is ideal for those who do not have the start-up costs to afford to purchase a machine outright. If you only require a machine for a set period of time or if you are unsure whether purchasing it would be worthwhile, leasing is a great solution.
A benefit to this is a lighter debt load and this can be a good option for beginning farmers. On one hand, farm equipment tends to depreciate quickly, but on the other hand, you don’t build equity when you don’t have ownership of the equipment.
Smart Farming Equipment
Whether you are leasing or you own your farming equipment, our iPad-based smart farming technology, PIPE AG, can be used to enhance your farming operations. From compaction maps and GPS directions to digital elevator tickets and farm records, smart farming can help you get the most out of your farming equipment.