Farmers are the original economists. Leftover milk goes to the pigs, scraps from the kitchen feed a hungry flock of laying hens and old buckets, barrels and tarps are used time and again to help keep the farm in the black. Old equipment is repaired time and again, and with the cost of new tractors, combines and other machinery, is often considered to have poor market value. However, that's not always the case. A farm equipment appraisal can often hold a surprising amount of value, because advancement in agriculture doesn't mean your old equipment isn't maintaining its value. Here are a few insights into why this equipment often retains its value better than you may think.
Why ag advancement doesn't equal poor farm equipment appraisal values
Drones that release specific amounts of fertilizer or beneficial insects where they're needed most. Bluetooth connectivity in the cab of your John Deere tractor. Precision agriculture to levels of precision that have never been seen before. Agriculture is quickly advancing even as fewer and fewer farm kids are willing to stay on the farm to take over for aging parents. But that doesn't mean that older equipment doesn't have value.
When it all comes down to it, today's agricultural concern is based on the perfect combination of a few specific elements: soil, climate and the farmer, who manages to work between the other two elements to ensure a successful crop, whenever possible. Having more advanced agricultural equipment doesn't make these two aspects change. For that reason, equipment that isn't as advanced still holds value.
This concept is borne out when farm equipment is appraised by a professional equipment appraiser with experience in agriculture. If your old tractor or combine are from popular lines that are known for their dependability and relatively long life, they may be worth much more than you would think. At the same time, a piece of nearly new equipment known for breakdowns and short useable lifespans may not appraise for as much as you might believe.
But where does equipment valuation fit into the picture? Most farmers can give you a good general price on what they can expect to make per acre, but often completely discount the value of the farm equipment as part of that calculation. However, much like so many expenses in other businesses, this aspect of your farm business shouldn't be overlooked. An equipment valuation performed by a certified equipment appraiser helps you get a better grip on what your farm's assets are actually worth, a necessary figure when you're projecting income or applying for insurance. When you need a loan to get through a bad crop year or two, a properly prepared appraisal report provides you with proof of value that will hold up with your financial institution.
As you can see, having older ag machinery doesn't always mean that equipment doesn't have value. A farm equipment appraisal may seem like something you could handle at the local equipment dealer, but their interests and your interests often interfere with getting a fair market value for your machinery. To get a proper equipment appraisal, you'll want to work with a certified equipment appraiser who has experience with agricultural equipment, giving them the knowledge and training to provide you with an accurate statement of value for your machinery.