Farm business management: Machinery investment and costs

Investment in technology-enhanced machinery has provided significant productivity gains for grain growers over the last 10 years. However, determining the appropriate level of machinery investment for an individual farm business can be a challenge.

Key points

• Investment in better machinery can offset the need for additional labour.
• On average, farming businesses have a 1:1 machinery income efficiency ratio.
• Machinery costs, including the use of contractors, are, on average, one third of farm income and are higher than fertiliser and chemical costs combined.
• Machinery replacement can be delayed until there are sufficient surplus funds in good years. However, the trend towards financing machinery over three to five years results in machinery capital being a fixed overheard cost in all years, and averages 11 per cent of farm income.

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• 3.09 mbFarm Business Management fact sheet: Machinery investments and costs (High resolution version)Investment in technology-enhanced machinery has provided significant productivity gains for grain  growers over the last 10 years. However, determining the appropriate level of machinery investment for an  individual farm business can be a challenge.
• 421.30 kbFarm Business Management fact sheet: Machinery investments and costs (Low resolution version)Investment in technology-enhanced machinery has provided significant productivity gains for grain  growers over the last 10 years. However, determining the appropriate level of machinery investment for an  individual farm business can be a challenge.