Machinery-Sharing Contractual Issues and Impacts on Cash Flows of Agribusinesses

Contractual arrangements for joint machinery ownership between independent agribusinesses are explored. A two-farm economic simulation model of locations in Texas, Colorado, and Montana is developed to provide insight associated with sharing combines. Important variables include combine size (efficiency), yield losses resulting from untimely access to equipment, the penalty structure for untimely delivery, and cost-sharing and depreciation deductions claimed between producers. Combine sharing is risk-reducing in most cases. The gains to both parties are lowest when harvesting periods overlap. While the value of sharing is positive under many scenarios, benefits from sharing are small relative to total farm revenue.


Issue Date:
2011-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/105536
Published in:
Journal of Agricultural and Resource Economics, Volume 36, Number 1
Page range:
139-159
Total Pages:
21




 Record created 2017-04-01, last modified 2018-01-22

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