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Agricultural Combine Remaining Value Forecasting Methodology and Model (and Derived Tool)

Author

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  • Ivan Herranz-Matey

    (Departamento de Ingeniería Agroforestal, ETSIAAB, Universidad Politécnica de Madrid, Av. Puerta de Hierro 2, 28040 Madrid, Spain)

  • Luis Ruiz-Garcia

    (Departamento de Ingeniería Agroforestal, ETSIAAB, Universidad Politécnica de Madrid, Av. Puerta de Hierro 2, 28040 Madrid, Spain)

Abstract

Harvesting is an integral component of the agricultural cycle, necessitating the use of high-performance grain harvester combines, which are utilized for a short period each year. Given the seasonality and significant cost involved, list prices ranging from a quarter to almost a million euros, a fact-based investment assessment decision-making process is essential. However, there is a paucity of research studies forecasting the remaining value of grain harvester combines in recent years. This study proposes a straightforward methodology based on public information that employs various parametric and non-parametric models to develop a robust and user-friendly model that can assist decision makers, such as farmers, contractors, sellers, and finance and insurance entities, in optimizing their harvesting operations. The model employs a power regression mode, with RMSE of 1.574 and RSqAdj of 0.8457 results, to provide accurate and reliable insights for informed decision-making. The robust model transparency enables us to easily create a mainstreamed spreadsheet-based dashboard tool.

Suggested Citation

  • Ivan Herranz-Matey & Luis Ruiz-Garcia, 2023. "Agricultural Combine Remaining Value Forecasting Methodology and Model (and Derived Tool)," Agriculture, MDPI, vol. 13(4), pages 1-15, April.
    • Handle: RePEc:gam:jagris:v:13:y:2023:i:4:p:894-:d:1126763
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    References listed on IDEAS

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    1. Timothy L. Cross & Gregory M. Perry, 1995. "Depreciation Patterns for Agricultural Machinery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 194-204.
    2. James Unterschultz & Glen Mumey, 1996. "Reducing Investment Risk in Tractors and Combines with Improved Terminal Asset Value Forecasts," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(3), pages 295-309, November.
    3. Jing Wu & Gregory M. Perry, 2004. "Estimating Farm Equipment Depreciation: Which Functional Form Is Best?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 483-491.
    4. Weersink, Alfons & Stauber, Steve, 1988. "Optimal Replacement Interval And Depreciation Method For A Grain Combine," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(01), pages 1-11, July.
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    Cited by:

    1. Ivan Herranz-Matey & Luis Ruiz-Garcia, 2024. "Enhancing Predictive Accuracy in European Agricultural Tractor Residual Value Estimation: A Double Square Root Regression Reappraisal," Agriculture, MDPI, vol. 14(5), pages 1-19, April.
    2. Ivan Herranz-Matey & Luis Ruiz-Garcia, 2023. "Agricultural Tractor Retail and Wholesale Residual Value Forecasting Model in Western Europe," Agriculture, MDPI, vol. 13(10), pages 1-21, October.
    3. Ivan Herranz-Matey & Luis Ruiz-Garcia, 2024. "New Agricultural Tractor Manufacturer’s Suggested Retail Price (MSRP) Model in Europe," Agriculture, MDPI, vol. 14(3), pages 1-21, February.

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