WEST LAFAYETTE, Ind. — Farmers have plenty to consider when
they decide whether to invest in farm machinery, a Purdue Extension agricultural
economist said in a recent Purdue Agricultural Economics Report article.
“Crop Machinery Benchmarks,” written by Michael Langemeier,
highlights two of the most important factors farmers should consider when
evaluating the economic efficiency of their farm equipment: Crop machinery
investment per acre and crop machinery cost per acre.
The information is especially helpful to Indiana farmers
because machinery represents a large cost in the production of the state’s
crops. In addition, many Indiana farmers have updated their machinery during the
last few years in response to strong crop net returns.
Because machinery is such a large investment, it is
important to evaluate whether a farm’s machinery costs are too high, Langemeier
said. Farmers whose operations have high machinery costs should carefully
evaluate whether further machinery purchases are necessary and
“If a farm has relatively high crop machinery benchmarks, it
is likely to have above-average crop break-even prices or be less competitive
than its peers,” Langemeier said. “In this instance, a farm should be extra
careful in determining whether future machinery purchases are prudent.”
A farmer also should consider farm size and the options of
owning, leasing or hiring custom work.
Timeliness of field operations, particularly during planting
and harvest, can have a significant effect on crop yields. That is why farmers
should carefully consider what kind of machinery they buy if they decide to own.
Larger machinery can harvest crops more quickly, but is more
expensive. Because of this, large farms might choose larger machinery, while
small farms might find it more cost-effective to own or lease smaller
To view the full article, which includes case studies and
more detailed information on machinery investments, download the Purdue
Agricultural Economics Report at