Fix or replace equipment a key question

Farmers need to think about the economics of fixing or replacing key pieces of equipment. Often, it boils down to dollars and cents.

By LACEY JARRELL

Capital Press

Published on October 4, 2013 3:01AM

Last changed on November 6, 2013 11:46AM

Lacey Jarrell/Capital Press
Ryan Vanspeybrock, service technician, repairs a John Deere 5520 tractor at the Papé John Deere dealer in Tangent, Ore.

Lacey Jarrell/Capital Press Ryan Vanspeybrock, service technician, repairs a John Deere 5520 tractor at the Papé John Deere dealer in Tangent, Ore.

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Lacey Jarrell/Capital Press
Scott Johnston, service technician, diagnoses a John Deere 6190R at the Pape John Deere dealer in Tangent, Ore.

Lacey Jarrell/Capital Press Scott Johnston, service technician, diagnoses a John Deere 6190R at the Pape John Deere dealer in Tangent, Ore.

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Equipment owners should think about whether they want a short- or long-term fix when considering whether to repair or replace equipment, said Don Kropf, owner of Linn Benton Tractor Co. in Tangent, Ore.

He said it may cost less to make a temporary a fix to complete a harvest, but additional maintenance and repairs can end up costing equipment owners more in the long run.

“If your costs are more than your payment, then it’s time to replace it,” said Billy Martin, sales manager at the Brim New Holland dealer in Salem, Ore. “When your down time is costing you money, it’s time to trade it in.”

When equipment owners are interested in repairing equipment rather than replacing it, Martin suggested seeking promotions like a pre-paid labor discount.

The hours can also be rolled over into next year, added New Holland service manager Boe Darras.

“If you bought prepaid labor this year, you might be able to use it toward your 2013 taxes, too,” he said.

Some parts and shop labor can also be used as a tax write off, according to Carl Laux, sales manager at the Papé John Deere dealer in Tangent, Ore. Laux said if equipment requires major repairs, owners should look at what expenses are financially large enough to warrant a trade-in or sale.

Harvesting annual crops can mean more mechanical repairs more often because the equipment typically sees more field hours than that used for other crops. Laux pointed out that crops like grain can wear combine augers, conveyor chains and thresh modules faster than grass seed harvests because the grain is more abrasive.

“Wheat is a high wear item on a machine,” Laux said. “If we have a rough harvest repairs are higher.”

At Papé, general manager Cory Carroll said post-harvest maintenance ensures equipment will be ready for start-up in spring, and he suggested owners bring machinery in for inspections and overhauls before putting it away for the winter. He said a typical overhaul for large equipment ranges from $5,000 to $7,000 and saves money by preventing breakdowns when machinery is needed the most.

“Ideally, we’d like them to bring equipment in now to have it ready for next harvest,” Carroll said.

Steve Danner, general manager at Ag West in Rickreall, Ore., said ground-engaging equipment, such as tillage headers and mower conditioners, typically wear out quickly and can be repaired, but only up to a point. When an implement’s structural integrity becomes compromised — like when frames crack or mounts and shank holders start wearing out — it’s time to consider replacing the item.

To avoid too much down time and concurrent expenses, Kropf advised keeping equipment, parts replacement and repairs on a rotation schedule so expenditures are cyclical and don’t surface all at once.



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