The equipment you use on the farm most likely makes up the largest investment of your operation. Even when you stick to a dedicated maintenance schedule, at some point you’ll need to put together a farm equipment replacement plan.

Why should you consider replacing farm equipment?

There are several reasons to start working on a farm equipment replacement plan. First of all, the cost of ownership increases with older equipment as it requires more frequent and larger repairs. You should also take reliability into consideration – you need to know that you have equipment you can count on in the middle of your busy season. New equipment comes with new technology, which can be a game-changer for your operation in terms of efficiency and productivity. You may also notice that you have a legitimate need for new equipment on your farm based on your tasks, your productivity, and your efficiency.

When should you replace aging farm equipment?

Many factors go into when is the right time to replace a piece of equipment, and the final formula is really up to you. Here are a few things to consider:

• Maintenance costs
  Track your maintenance costs – when these start to get higher and higher you will want to look into replacing vs. maintaining as far as long term costs go. Newer equipment helps you avoid breakdowns in the middle of your busy season or harvest. You don’t want equipment left in the field or out in the rain because of constant maintenance. I can’t tell you how many times I’ve had to repair our hay baler ahead of a late afternoon southern thunderstorm!
• Large component failure
  When you start seeing larger components break down, such as transmissions or engines, it’s time to do a cost analysis on whether it’s worth it to replace the equipment.
• Used equipment values
  Watch used equipment values to maximize your opportunity.
• Seasonal timing
  Consider replacing equipment either ahead of your busy season or immediately after your season ends. This minimizes the impact of changeover in equipment and gives you time to acclimate to any new technology or controls without the added stress of working through harvest.
• Bonus depreciation deals
  Watch for bonus depreciation deals. This is a tax incentive that allows you to immediately deduct a large percentage of your equipment purchase. Be sure to check with your accountant for applicable rules.
• End-of-year tax benefits
  Consult with your accountant or financial advisor if you’re considering taking advantage of the tax benefits associated with buying equipment at the end of the year.
• Gut feeling
  When you operate a piece of equipment every single day, you know every sound by heart. That also means you know when something’s off. Trust your gut when it tells you it’s time to think about new equipment.