Storage for Machinery Is Well Worth the Cost, Ag Engineer Says

When snow piles up over machinery that is left outside, winter eats away at a farmer's investment by deteriorating tires, belts and bearing seals. Next spring, rain will rust bare metal parts and the sun will fade the paint.

Storing machinery inside can significantly reduce that kind of damage and depreciation, according to Vern Hofman, an agricultural engineer with the North Dakota State University Extension Service. "Next to land, machinery ownership is the second largest cost of a farming operation. It makes good sense to protect that investment."

Hofman cites a Missouri study of implement dealers in the northern plains that found the trade-in value of housed equipment after five years is much greater than the value of unhoused equipment - 16 percent greater for tractors, 20 percent greater for harvesting equipment, 12 percent greater for planters and drills and 5 percent greater for tillage equipment. The average increase in value for housed machinery is 13.5 percent. Other parts of the country that have more precipitation and more deterioration effects on machinery showed resale values of housed equipment exceeded those of equipment stored outdoor by more than 20 percent.

For example, keeping $800,000 worth of tractors, combines and planters inside instead of outside would mean saving $54,000 after five years, assuming a 50 percent trade-in value and assuming the trade-in is worth 13.5 percent more if the equipment is housed.

Inside storage of a small tractor will increase the trade-in value by $400 to $500 per year. Proper storage of a four-wheel-drive model would add $1,000 to $3,000 per year to the resale value.

"Inside storage also will save money by reducing repairs and time in the shop," Hofman says. The survey revealed that housed machinery had only 7.6 percent downtime, while unhoused equipment was down 14.3 percent of the time that it should have been working. "During a critical season such as harvest, a combine that is not working can be costing several hundred dollars per hour," he notes.

To determine whether a new machinery storage building is a good investment, a method to allocate building costs must be determined. The building may have alternative uses and will have a longer life than most implements, so the annual cost for the building must be determined. Then, compare the cost to the expected increase in value of the machines stored on an annual basis.

"Based on increased resale value, machines such as tractors, combines, planters, drills, forage choppers, trucks and pickups should be kept inside," Hofman notes. "Tillage equipment should be the last to be placed inside, since these pieces take up a lot of space and decline in value only slightly faster when left outside." For tillage equipment, the deterioration that occurs to the tires and bearings usually is less than the cost of providing building space.

"If a farm operator does not have enough storage space for the major pieces of equipment, it may be a good investment to rent space from a neighbor if possible," Hofman notes. "Keeping expensive farm machinery inside is an excellent way to cut costs and extend its life."

###

Source: Vern Hofman, (701) 231-7240, vhofman@ndsuext.nodak.edu 
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu