Is farm equipment financing right for your business? I expect to answer this with you over the next few minutes. Researching options to obtain agricultural and farming equipment is smart. You need tools for the hard work you do.
New ag equipment is expensive. One long wheel-base tractor will be more costly than most homes. A harvesting combine can be over one million dollars. You have to shuck a lot of corn to pay for that, and that is why you need it.
The newest equipment will give your farm a cutting edge in production over other farmers with the same crops. In many business sectors, the best way to get ahead of the competition is to invest in better equipment. Increasing production and efficiency lowers your costs and increases profits.
Not everyone can pay cash for a combine at a John-Deere dealership. If you can, I doubt you would, because it is not smart to invest too much capital into equipment. You need your money for the operation of the farm. Farm equipment financing can allow you to grow your operation.
While you are operating and paying the note on equipment your credit score goes up. The measure of how well you can be trusted with large sums of a bank’s money is your credit score. A better score offers lower interest on any loans and higher profit from that equipment. With timely payment, you will enjoy open arms from bankers on future purchases to stay ahead of the competition.
The latest technologies in ag equipment include drones, robotic harvesters, and intelligent irrigation systems to become labour multipliers on your farm. New tech is rarely cheap and often very advantageous. Equipment manufacturers know this, and many offer in-house financing to keep the transaction between you and them, excluding the bank’s fees, interest, and tighter loan stipulations. Having documentation in order helps any loan process go smoother.
The last generation of robotics is now being accompanied by AI. Artificial intelligent farming can eliminate the manual labour needed for planting, weed control, irrigation, insect control, and harvesting. AI can monitor crop health, climate changes, and yield, providing you with all the data it finds to make well-informed decisions.
Australian farmers are only second to New Zealand farmers in their lack of government subsidizing. According to government research, only 2% of farmed revenues are subsidised. For reference, Korea is 52%, Switzerland 55%, Iceland 59%, Japan 46%, and Europe 52% of farm revenues were subsidised. That makes it very hard for Australian farmers to compete in global sales.
This lack of support has driven net farm income and critically injured exports by as much as 30%. This lack of support from the government to farmers is losing money for the nation. Considerable reform must be introduced to help our farmers.
The World Food Program estimates that 785 million people are in a food crisis today. The WFP only feeds 160 million. How can we home to feed humanity with ignorance at the top levels preventing it?
