Steve Cubbage: ROI: The Planter Might Be As Key As the Plant

Posted by Steve Cubbage on Tue, 03/26/2019 - 09:26

Maintaining the right equipment balance is harder than Goldilocks trying to figure out which chair she wants to sit in. Making such decisions are obviously first driven by the weather. What might seem like the right balance one year might be blown up by Mother Nature the following year. Then you have a myriad of variables such as labor availability, crop prices and if the number of acres you need to cover has increased or, in some cases, decreased.  

As sensor and reporting technology have advanced so too have the software services that can digest and start to interpret such data in layman’s terms. Ironically, calculating the cost and depreciation of motorized farm machinery is not much different than doing the same thing with the average Joe’s automobile. Instead of miles and model year for a car, it is hours and model year for a tractor. Factor in per-hour labor and fuel costs plus interest, and the math hasn’t changed much since the Farmall M and Johnny Popper days. But keeping track of costs for a John Deere 4020 on a 500-acre farm 50 years ago was simpler than the tractor, planter and combine fleets on today’s farming enterprises.

Real-time, real-machine data streaming wirelessly now provides the detail that can truly move the needle on machine ROI. For the first time you can see not only hours in the field working but more importantly the hours or minutes it took to get to that field and how much time you spent idling while filling the planter or waiting for a load of fertilizer. Tachometer hours matter to the tune of $150 to nearly $200 per hour for modern-day tractors, sprayers and combines. How much more profitable is the 7,000-acre farmer who averages only 8% to 10% road time verses the guy who thought he had to expand to 10,000 acres but spends more than 25% of his total machine hours on the road? Was picking up that extra 500 acres an hour away really worth it?

Given 2018’s late harvest and a prolonged winter that pushed a majority of the fieldwork to this spring, machinery what ifs are more real than ever. Continued tight margins mean increased ROI has to come from someplace other than just crop inputs.

What if I trade in my two 24-row planters and two MFWD tractors for a single 90' high-speed planter and 570-hp articulated four-track tractor?  That’s exactly what one of our farmer customers did, and even though the price tag was near the million-dollar mark, his per-acre cost actually calculated to be less than before.

In today’s environment, question every machine, operator and field operation. Do I buy the bigger grain cart? If I add acres can my current combine handle it? Do I make repairs or trade? Only real data about and from your machines can deliver the best answers.

Bottom line: Real-time machine data is as valuable as yesterday’s yield maps. That’s why tons of money is being poured into enterprise software and services such as Conservis and Granular. Asset use efficiency is a key metric of such platforms, which need the automatic flow of data from your tractor and combine to work.

Then you have machine efficiency software such as CropZilla that focuses on finding the “right machinery mix” for your operation. It is specifically geared to handle the what ifs to tell you if that million-dollar purchase was an economically sound decision or an emotionally bad one.

Dec. 16-17, 2019     JW Marriott, Indianapolis
How are you keeping up with this brave new world of technology? Attend the Farm Journal AgTech Expo. For details, visit www.FarmJournalAgTechExpo.com

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