Equipment Investment: How Much is Enough?

I just came upon this blog and discovered it to be a great learning resource. The food conversation is dominated by a few issues which obscure the many other factors at work in the growing of food specially from the farmer’s perspective.

brentgloy's avatarAgricultural Economic Insights

Flickr: johnnyalive. Johnny Klemme

by Brent Gloy

The rapid descent of crop prices and resulting margin squeeze have forced farmers to carefully evaluate their financial structure and look for ways to reduce their cost of production. Because prices for inputs such as fertilizer and seed have been slow to adjust, much of the attention has turned to fixed costs such as land rents and equipment costs. These are typically the largest categories of fixed costs on most farms. While we have looked at costs associated with farmland extensively, equipment costs are often very large on many farms and deserving of attention. There is likely great variation in equipment investment and costs across most farms.

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