When leasing farm machinery pros and cons are many; why should you lease your farm equipment?
The farming industry is vast and variety but it all comes together for one amazing result: countless types of ingredients necessary for food and other products grown and distributed to anyone who needs these ingredients, as well as to supermarkets to go straight to the public.
The farming industry creates the vast majority of food products that supply the world, making it one of the most important and potentially profitable businesses to get into.
Farming as an industry is great for new business owners, because with a little bit of research and the right setup, you can have yourself a decent first harvest and build off of that until your farming skills are primed and your harvests are top notch.
The trick with farming is the business side of it; you’re only really making a profit after the harvest when sell equipment, meaning you have to get to the first harvest to start making money.
Even if you have a great deal of funding, you already want to spend money to get the best land possible and need to hire employees and such; the cost of equipment added on can make for a rough first start. That’s why so many farmers choose the alternative of leasing their farm equipment, but for those not familiar, are there leasing farm machinery pros and cons?
How Farm Equipment Comes into Play
Every farmer’s season is as meticulously planned as possible; there are already variables in weather patterns and such, and making sure that you’re prepared for these as well as other issues is important. Before you even pick a plot of land, you need to find that special match of land to environment to crop.
All of these need to be as compatible as possible in order for your crop to grow well; business owners that have the money can just buy a piece of land ideal for farming overall, but that can be expensive. Making sure the land is good for the crop and the environment the land resides in is good for the crop is essential, and that means picking a crop as well.
You can approach this by finding good land and finding the crop that matches it best, or by getting a crop good for the general area you reside in and then finding land. Either way, you need this to be as effective a match as possible as it will affect you in the long run.
From there, it’s all about preparing for the process of farming, which begins the second you plant the seeds. Irrigation, weeding, tilling the land, measuring plants to ensure that they’re growing according to specifications, and more are all part of the process of farming, and these steps last throughout the vast majority of the season.
Once the crop grows fully and the harvest arrives, transportation and storage are necessary for your crops. Every one of the steps in the actual planting and growing process involve equipment, and this is a vast majority of the farming season; whether it’s hoes or tractors, you need good equipment for your farm to be successful.
Leasing Farm Machinery Pros and Cons
All farms debate leasing at some time or another because, instead of paying a high cost up front or possibly taking a loan, you pay flat monthly rates to get the equipment loaned out to you, and as long as you abide by the contract, everything goes well.
You get benefits like upgrades and get equipment repaired over the course of the lease, as well as get tax deductibles out of the lease.
However, the trick with leasing is that it is a contract with predetermined specifications, and if those specifications aren’t agreeable with you, this could hurt your farming business. There are both leasing farm machinery pros and cons, but many of the cons are avoidable if you shop around as far as your lease.
Making sure the contract period is reasonable is especially important because your farming equipment is only needed for three of the four seasons, but also making sure you’re not getting overcharged is important. To learn more about leasing farm machinery pros and cons, click here.