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The Effects of Machinery Costs on Net Farm Income

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  • Ibendahl, Gregg

Abstract

Farmers have many options for choosing equipment that is required to grow and harvest a crop. Farmers may own their own equipment, lease it, or have the field operations completed using custom operators. For those farmers who choose to own most of their equipment, there are additional decisions about the size and quantity of equipment needed. This paper uses a 15-year dataset of farm financial data from the Kansas Farm Management Association (KFMA) to examine how depreciation, machinery repairs, and the use of custom operators vary by farm profitability quintiles. Results indicate that the most profitable farms also have the highest levels of depreciation but that the machinery level is probably not excessive.

Suggested Citation

  • Ibendahl, Gregg, 2015. "The Effects of Machinery Costs on Net Farm Income," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2015, pages 1-11.
    • Handle: RePEc:ags:jasfmr:233864
    DOI: 10.22004/ag.econ.233864
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    References listed on IDEAS

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    1. Beaton, Aaron J. & Dhuyvetter, Kevin C. & Kastens, Terry L. & Williams, Jeffery R., 2005. "Per Unit Costs to Own and Operate Farm Machinery," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 37(1), pages 131-144, April.
    2. Dumler, Troy J. & Burton, Robert O., Jr. & Kastens, Terry L., 1998. "Implications Of Alternative Farm Tractor Depreciation Methods," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20913, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Keywords

    Agricultural Finance; Farm Management;

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