By CELESTE BAUMGARTNER Ohio Correspondent ST. EDWARD, Neb. — Is it time to sell equipment that’s been doing nothing but gathering cobwebs, even if it is paid for or brings back a lot of memories? Maybe so. It’s probably costing money an owner could better use for expanding their farming operation, or for retirement. “There’s a lot of dollars tied up in equipment that is not being used,” said Mark Stock, who, with his brother, Ron, founded BigIron Online Auctions. “If you have a motorized piece of machinery, if you don’t start it and run it regularly, you have dead batteries, tires that go bad, the fuel pumps go out because the fuel hasn’t been run through, the seals will get hard. The worst-case scenario is, you get mice and rodents that deteriorate things, as well.” If that machinery is inside a building, it is also taking up space where a farmer could store something else. Stock said he’s visited many farms where the owners have old equipment sitting in a building, and they have a new piece of equipment outside fading in the sun. A good rule of thumb to use is an economic life of 10-12 years for most farm machines and a 15-year life for tractors, according to a 2015 paper by William Edwards of Iowa State University. The estimated costs of depreciation, interest, taxes, insurance and housing contribute to the total cost of ownership, which can be almost 10 percent of the original cost of the tractor. It is not unusual for the tractor’s ownership costs an hour to be in the $40 range. Stock suggests farmers go through a process to determine what equipment they need to be unload: •Take inventory. Make a list of the equipment you have. •Determine if you’re going to use it in the next year or two. If not, you need to sell it because of the costs mentioned. •Prioritize what has the most value to you and what is expendable. •Evaluate your business and retirement goals. Consider what is holding you back from selling. •Consult with an expert. Auction companies such as BigIron, and others, can help you estimate the value of your equipment. BigIron has representatives all over the country who can visit a farm and help determine what equipment is worth. What is unique about the online auction is that a farmer does not have to sell everything, and they don’t have to move the machinery. It’s an excellent way to turn unused equipment into cash. “Anytime farmers have the stresses of a difficult financial situation, selling that unused equipment can relieve the stress,” Stock said. Besides stress, with retired or older farmers, sometimes holding on to old equipment can be a result of a depression-oriented mentality, even hoarding, according to Dr. Val Farmer, a pioneering psychologist in rural mental health issues and a syndicated columnist for 28 years (including for Farm World several years ago). “I can be kind of a memory thing, of holding onto the past,” he said. “This becomes an issue when the spouse or the adult children that are trying to farm with them, or even adult children that aren’t farmers but care about the well-being of the parent. It would be a source of family conflict. “The real solution is probably that Dad and Mom need to have more rounded lifestyles and other hobbies and interests. To move on and have a purpose to their lives, rather than sitting around wanting the old life back.” Farmers do not need to clear out every piece of equipment that has been a part of their story, Stock said. “But, understand sentiment and emotion may overwhelm your ability to make logical decisions about your equipment inventory.” Learn more about BigIron at www.bigiron.com or call 800-937-3558. |
