Get A Grip On Your Checkbook
Oct 11, 2008
If you haven't yet received the bill for the repair parts you purchased to repair your combine or harvest equipment, make sure you're sitting down when you open the envelope. Cost of some parts has doubled, maybe tripled. The first response is that dealerships are gouging farmers in reaction to last season's high commodity prices. For the most part, that's not the case. Steel prices have risen more than 25 percent in recent months, after several years of steady increases. Rubber products use a lot of petroleum in their manufacture, and we all know what oil prices have done over the past year. As a result, belts, tires and anything that involves rubber is nearly exponentially higher in price. Higher diesel fuel prices have increased shipping costs, and we all know who pays all the incremental costs associated with manufacturing and shipping parts--the farmer.
There's no relief in the visible future. There are sometimes price reductions related to new manufacturing processes that reduce the cost of production of individual parts. And sometimes mainline manufacturers suddenly "find" ways to trim prices when shortline and aftermarket manufacturers come online with generic parts at lower prices. But for now, as you harvest this year's crops and do all the mental math of figuring what you want to do next year---swallow hard and add 50 percent to your repair and maintenance projections for machinery.