The Effects of Machinery Costs on Net Farm Income

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.

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Journal Article
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Journal of the ASFMRA (American Society of Farm Managers and Rural Appraisers), 2015
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 Record created 2017-04-01, last modified 2018-01-23

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