Farm Capital Expenditures Fall Significantly

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by David A. Widmar

One of the first adjustments a farmer or rancher makes in light of tight financial conditions is holding off on farm capital expenditures. By running their equipment longer or using their building for a few more seasons, farmers can often defer capital investment in tough times. Because of this, capital expenditures are an important financial metric to track and observe. This week we are taking a look at the USDA’s latest estimates for farm capital expenditures. Continue reading

Farm Machinery Slowdown

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By Brent Gloy

The U.S. farm sector continues to work through the adjustments necessary to restore profitability. These adjustments include the painful process of bringing fixed costs under control. Equipment and land costs are two of the most significant fixed cost items for most farms. As we have discussed before farmland values and rents appear to be in the process of working lower. In this post we take a look at some indicators of farmer’s investment in farm equipment and how that has changed over time. Continue reading

Changes in Capital Investment on U.S. Farms

Flickr: johnnyalive. Johnny Klemme

by Brent Gloy

The U.S. farming system is capital intensive. As the agricultural sector adjusts to lower commodity prices many areas of the agricultural economy will adjust and it’s hard to imagine that capital expenditures will escape significant adjustment. We have looked at fertilizer prices, seed prices, land prices, and equipment investment in recent posts. With respect to machinery and equipment investment, David recently noted that both USDA and farm record keeping data indicated that these costs had not yet showed declines. We decided to take a further look at the main components of capital investment on U.S. farms and examine how they had changed over time. Continue reading