Owning and operating equipment might be one of the most enjoyable parts of farming. However, it’s an area where many producers have room to improve in terms of efficiency.
We are efficient at quickly planting and harvesting large acreages, but because we are fast does not mean we are efficient. Timeliness is only one measure of efficiency; cost and quality must also be considered.
Factories view equipment as a necessary cost to manufacture high-quality products. They focus on cost control, which can most quickly be impacted by use. If a machine costs $100,000 and operates 50% of the time, their cost has the potential to improve by 50%.
The goal is to produce as much as possible with a given machine, thereby lowering the cost of production. Pride of ownership, convenience, style and tax write-offs are not part of the ownership equation for most manufacturing companies. Farmers sometimes rationalize a piece of equipment that may not improve efficiency. What percentage of the time do your machines operate (in-season)? Can you keep equipment moving? How much more could your equipment do operating 22 to 24 hours a day? These are questions to consider. You might significantly lower per-acre equipment cost by reviewing performance and asking some basic questions.
Quality is also key for optimizing efficiency. New equipment isn’t necessarily the solution for quality; however, quality equipment is the solution to maximize efficiency. Minimizing downtime in-season for a piece of equipment pays huge dividends. In the off-season, allocate time for repairs, adjustments and calibrations. A zero tolerance for downtime will help you prioritize repairs and replacements.
Efficiency has also been improved by innovations such as Real-Time Kinematic (RTK or auto-steer) technology, new lighting systems, cab comfort, performance monitors and other tools that measure performance.
Most farmers have embraced these technological improvements. Many have spent between $20 and $50 an acre for machinery information systems. Are we using these invested dollars to their full capacity? If we have better lights, are we running through the night? Does every operator fully understand his technology systems in order to get the best information, maps and accuracy? If we have gaps in this area, we’re leaving money on the table.
Labor management is the final key to equipment efficiency. For example, if you’re operating a 24-row planter less than 24 hours a day and take on more acres, you have two choices: trade to a larger planter or run the current machine more hours. Provided you have quality people, planning and equipment, you’ll be able to reduce equipment costs by spreading the same machine across more acres.
Below is an online tool to help you calculate equipment and labor costs for your operation.
Chris Barron is director of operations and president of Carson and Barron Farms Inc. in Rowley, Iowa. He is also a farm business consultant and the author of the AgWeb.com blog "Ask a Margins Expert." To submit questions and comments, e-mail Chris at email@example.com.
- February 2013