How Much More Do Capital Purchases on Grain Farms Need to be Reduced?

In a recent article, Illinois Farm Business Farm Management (FBFM) staff evaluated the impacts of machinery costs on Illinois grain farms, noting two important items (farmdoc daily, June 16, 2017). First, there is a strong link between lower machinery costs and higher farm profitability. Second, capital purchases have been coming down since 2013. On many farms, the necessity of meeting lower cash flows likely will require further reductions in capital purchases. However, additional reductions in capital purchases requires changing machinery complements held relative to complements on farms ten to fifteen years ago.

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