Iron Disease

Conversations | 30th September 2024 | By Chris Lawlor

Independent Contributor

“Iron Disease – The purchase of new machinery with a questionable ROI.”

It’s actually a large factor to consider with regard to sustainability. During late spring/early summer around the world it’s time to put the majority of crops in, whether its 10,000 acres of Barley/Canola in Victoria or Swedes/Kale for dairy cows and sheep in the following slow growing winter months.

On a livestock farm this coincides with lambing or calving as well as unreliable equinox weather. This leads to milking or docking lambs interrupting days that could be spent doing preparation groundwork for crop planting. On a dairy farm, you’ve just finished calving and trying to give staff some time off before mating begins, as well as managing a flush of grass that will need cut for silage or hay.

On my farm it has rained most of September and no groundwork could be done, normally we have done as much as we can with our own tractors and implements, in recent times contractors have upgraded to 5m power harrows and 10 furrow ploughs which achieve the same result in half the time.

There are many variables involved in any farmers decision on whether to purchase equipment or use contractors.

  1. Availability of contractor when conditions are right.
  2. Availability, competence and fatigue level of current staff to add into their routine.
  3. Cashflow restrictions, finance considerations and depreciation.
  4. How to cut 100ha of silage at the same time.

During a Victorian cropping season with wet weather at harvest, a 6t Milling grade crop can soon turn into a 5t Feed grade crop or worse, if you aren’t top on the contractors list and the few opportune good days are lost, the same can happen in a wet or late Autumn break and crop establishment is affected.

So…..while I’m considering the pros and cons of purchasing a larger tractor to put my crops in, the Victorian cropper is considering a new seeder or combine harvester. There is no right or wrong, but at times less experienced farmers can get talked into the nice shiny and very comfortable new machinery, especially with a smart rep quoting 1-3% finance.

On my farm with two John Deere 6140m tractors with 5,000 and 10,000 hours on them, do I buy a bigger 6175m and 3-5m power harrow to put in 60ha of pasture and 80ha of swedes, kale and turnips? Do I upgrade my 1984 Landcruiser to spray them or pay $40/ha for a contractor?

There are too many variables to account for in an excel table, so the below table focusses on some of the basics involved in my decision on a new bigger tractor and implements required to do the work similar to our local contractor. Other variables

  • Can the contractor do the work on time?
  • What work can I do with the 6140m?
  • What else could the $280,000 be used for?

My calculation has Depreciation and Costs of $33,700 as opposed to the contractor at $40,740, considering the opportunity cost of the $280,000 and availability/competence of our own staff I lean towards contractors.

Timing of sowing and spraying can be the difference between an 8t crop of kale and 12t crop, using your own equipment and staff means you can have crops in sooner than a contractor and crop yields potentially 50% better.

Obviously if the crop area was doubled the scenario changes, so scale an important consideration. The classic Australian example is the 10,000 acre cropping farm where timing or waiting can result in significantly reduced yields and the associated business risk, hence after a run of good La nina growing seasons, and historically higher prices due to wars affecting supply/demand globally, some have had the balance sheets to upgrade or purchase new equipment.

There are many exciting developments to consider in the near future, with drone spraying and self-drive tractors. Combine this with the development of ‘one pass’ machines or accurate GPS inter row sowing, our tech savvy Gen Z and Millennials can easily succumb to ‘iron disease’.

It’s a common discussion on which tractor is better? MF, JD or FENDT among others, I learnt to drive the Massey Ferguson 165 in the photo above when I was 12, so literally anything we have now is wayyyy more betterer…..

Tags

  • Productivity
  • Machinery