How much does machinery cost your tillage farming business?

As part of the Knowledge Transfer Scheme, Teagasc has looked at the machinery costs on various tillage farms throughout Ireland.

Some of the results from the study were presented at last week’s Teagasc National Crops Forum by Shay Phelan.

The Teagasc Crops Specialist said the survey collected data from 139 individual operators farming a combined total of 37,500ac.

Survey details:
  • Number of farms: 139;
  • Total area in survey: 37,500ac;
  • Range of farm sizes: 18-2,500ac;
  • Average tillage area: 268ac;
  • Soil type: heavy, medium and light.

On machinery costs, he said: “There’s a huge difference and that has a real impact on your farm business and how much it costs you to grow a tonne of grain.

Machinery costs are the highest single cost for growing your grain. Variable costs sit somewhere around €400/ac and machinery costs account for about 40% of that.

To get a full understanding of the costs associated with machinery, Phelan presented both the long-term costs and cash costs for these enterprises.

The former includes: projected repairs; diesel; interest; and machinery deprecation. The cash costs encompass all of the costs that were paid for in 2016. These include: repairs; diesel; hire-purchase repayments; and machinery hire.

One of the interesting figures that always comes out, he said, is the investments made in machinery. In this instance, the average farmer had invested €1,100/ac in machinery.

The results of the survey also showed that the average cash costs associated with machinery stood at €117/ac and the long-term costs were €134/ac.

“The range is huge; it’s anything from €50/ac to almost €250/ac,” he said.

In addition, 14% of all the farmers surveyed had machinery costs in excess of €160/ac.

“You can make arguments about timeliness. But, financially, the guys would have been better off getting a contractor in,” he said.

The Teagasc representative added: “Increasing farm size isn’t necessarily a guarantee that you are going to reduce your machinery cost.

This old thing of buying a new machine and going out and taking out more conacre doesn’t necessarily dilute the cost the machine.

When the surveyed farms were broken down into three size categories – 0-200ac, 200-500ac and over 500ac – Phelan said: “There’s about €10/ac in the difference between the average of the three groups; there’s nothing in the difference.”

On land fragmentation, he said: “There’s almost €20/ac in the difference between the most and least fragmented farms.”