3C
THE DAILY ASTORIAN • FRIDAY, JUNE 24, 2016
Farmers saving money by sharing
farm equipment on the market, and sales have
dropped considerably for large, new farm equip-
ment, as growers bought heavily when com-
modity prices were higher but have been forced
to be more conservative lately. O’Brien said the
strength of the market is in smaller equipment,
including tractors under 40 horsepower, pur-
chased by hobby farmers with secondary income
streams. O’Brien is uncertain how much equip-
ment growers may be purchasing cooperatively.
“A lot of the harvest and planting is at the
same time. That’s historically been the deter-
rent,” O’Brien said. “It’s certainly not surprising
there may be more (sharing) happening today
than in the past because of the economics of it.”
Expenses for equipment,
personnel can be reduced
though partnerships
By JOHN O’CONNELL
Capital Press
T
o minimize their expenses, Nezperce,
Idaho, growers Nate and Steve Riggers
share combines with other farmers nearly
1,000 miles away in the Corn Belt.
The brothers, who operate a diversifi ed farm
in n orthern Idaho, estimate that over the years
they’ve saved about 40 percent per machine
through the joint ownership of combines with
farmers in Iowa and Nebraska. After harvest-
ing their grain and grass seed crops in Northern
Idaho, they’ve trucked machines to the Midwest
in time to harvest corn and soybeans.
Though commodity prices have ebbed lately,
equipment costs continue on a steady climb.
Sharing equipment — a new combine can cost
as much as $400,000 — is becoming increas-
ingly enticing to many growers. Some, such as
the Riggers brothers, even look to other regions
of the country to fi nd a willing partner with a dif-
ferent harvest schedule.
Agreements have been forged on simple
handshakes or by establishing complex limited
liability corporations. An LLC allows owners to
manage while protecting them from personal lia-
bility for the organization’s debt and obligations.
140
Prices paid index for ag machinery and
supplies & repairs, 2007-April 2016
114.2
120
(Index where 2011=100)
Machinery
Supplies and repairs
100
105.4
89.1
80
Though commodity prices have dropped, farm
equipment costs have continued on a steady
rise, prompting many growers to reach creative
arrangements with neighbors — or even growers
from different regions of the country — to share
equipment and maximize its use.
76.4
A lesson learned
The Riggers brothers, who have a non-irri-
gated farm in the Camas Prairie, started shar-
ing equipment in 2000, based on lessons they
learned at The Executive Program for Agricul-
tural Producers — a two-week, intensive farm
management school offered by Texas A&M
University.
“You get drilled into your head a lot at
TEPAP about using your assets better,” Nate
Riggers said.
In visiting with Midwestern farmers at the
event, he learned he commences harvest a
few weeks earlier than Corn Belt growers. He
formed an LLC with Nebraska farmer Don
Cantrell to jointly own a combine, each contrib-
uting an annual sum based on his hours of use.
They each own headers for their respective
crops to fi t the machine. The following year, the
brothers formed a second LLC to share another
combine with an Iowa farmer, Tim Richter.
They formed a third LLC to share a combine
with another Iowa farmer, Ben Riensche, two
years later.
They still cooperate with the Nebraska
farmer.
Though their business arrangements have
ended with the Iowa growers, the farmers all
remain close friends, which Nate Riggers insists
has been the best part of the agreement.
“(Riensche) will be at my son’s wedding next
year,” he said. “It’s a neat relationship.”
He also rents a combine designed to work
hillsides to an Oregon grower.
Nate Riggers said other growers are skepti-
cal when he tells them that he ships heavy equip-
ment a third of the way across the country to
save money. But he’s found the shipping cost —
$2,400 one-way when he started and now about
$4,500 — is offset by sharing the interest and
insurance on a combine.
“You’ve got to have a party on each end that
Collaborative farming
Courtesy of Ben Riensche
Iowa farmer Ben Riensche loads a combine on a truck to ship back to Northern Idaho for
use. Riensche and Idaho farmer Nate Riggers had an agreement to share equipment. Rig-
gers no longer shares equipment with Riensche but still shares with a Nebraska farmer.
Source: USDA NASS
John O’Connell and Alan Kenaga/Capital Press
60
2007
’08
’09
’10
’11
is committed to the savings and sees the big pic-
ture and doesn’t get hung up on details,” Nate
said.
Working with neighbors
Having good neighbors has enabled Sid
Freeman to get by with one less plow and a
smaller fl eet of trucks.
Freeman said he has a bean combine to offer
his neighbor, who in turn has plenty of trucks.
“When it comes to harvest time, I don’t have
enough trucks to keep things running. He’s got
a lot of trucks, and during that particular time of
harvest season, he’s not using all of his trucks,”
Freeman said. “I’ll go and cut beans for him and
he’ll come and do the trucking for me.”
Another neighbor plows for Freeman, who
reciprocates with spraying services. Spreading
resources over several farms has the added ben-
efi t of maximizing farmworkers’ time.
“It adds up to tens of thousands of dollars
being able to trade back and forth in that man-
ner,” Freeman said.
Equipment sharing used to be standard prac-
tice for farmers and fell out of fashion somewhat
when commodity prices spiked a few years ago,
Freeman contends.
“Back when farms were a lot smaller and
there were a lot more farms, trading like this was
commonplace,” Freeman said. “The ag industry
has gotten fat in the last six to eight years.”
Cathy Wilson, vice president of research col-
laboration at the Idaho Wheat Commission, said
even within the state, the wide variety of crops
and differences in climate have opened a window
large enough to make sharing of planting and har-
’12
’13
’14
’15
2016
vesting equipment possible for some farmers.
Wilson said there’s about a two-week dif-
ference in the planting and harvesting sched-
ules of south-central Idaho’s Magic Valley and
Swan Valley in e astern Idaho, which has opened
the door for some farmers in those areas to share
equipment. Wilson also knows of an equip-
ment-sharing agreement involving brothers who
farm at different elevations with slightly different
seasons, avoiding potential scheduling confl icts.
Big investment
Most farm equipment is expensive. A farmer
can easily spend more on a tractor or combine
than on his house.
Shane Mitchell, marketing director with
Milestone, a Blackfoot, Idaho-based potato seed
cutter manufacturer, said equipment costs have
been driven up in recent years by new features
and innovations.
His company’s original seed cutter in the
1960s had a single deck with no sizing capa-
bilities. The latest Milestone cutter has a double
deck with three sizers and speed controls. The
cost of a new, basic model ranges from $130,000
to $190,000, depending on size.
The same trend holds true with tractors and
other implements that now come standard with
GPS-guided computer technology for vari-
able-rate applications.
Charlie O’Brien, senior vice president with
the Association of Equipment Manufactur-
ers, said new environmental requirements on
machinery, especially governing engine exhaust,
have spurred equipment price increases.
O’Brien said there’s now a glut of used
Texas A&M Extension economist Danny
Klinefelter said equipment sharing is a prime
example of collaborative farming, which was
the focal point of a national conference his uni-
versity hosted June 13-14 in Nashville.
Klinefelter advises farmers who collaborate
to form legal entities, such as LLCs, to address
potential problems. He also suggests farmers
fi rst get to know would-be partners — he knows
of one partnership that dissolved because one of
the participants was too rough on the equipment.
“It’s like getting married. You’ve got to be
compatible,” Klinefelter said.
Klinefelter said sharing equipment can
also provide growers the wherewithal to keep
current on technology, such as variable-rate
prescriptions.
But equipment sharing merely scratches the
surface of how farmers are now collaborating to
control their inputs.
Three farmers, for example, formed a service
bureau to hire an accountant and data entry pro-
fessional, Klinefelter said.
Other farmers have formed operating enti-
ties in which they retain their land ownership but
jointly hire fi nancial offi cers and other special-
ized personnel. They also share equipment, often
fi nding they can buy more specialized and mod-
ern machines when they pool their resources.
“They share the cost and returns of the oper-
ating entity,” Klinefelter said.
Fairfi eld, Washington , grower Marci Green
and her husband employ a full-time mechanic,
who spends about four or fi ve weeks per year
helping a neighboring farmer work on equipment.
The neighbor, who couldn’t afford to hire a
mechanic on his own, pays Green to cover her
worker’s wages, which helps her get the most of
the mechanic’s time.
“This week, we’re in a position where we’re
caught up, and it’s a rainy time of year, and we
didn’t have a whole lot to keep him busy,” Green
said, as her mechanic worked on the motor of
her neighbor’s truck.
She and her neighbors also share equipment.
Two years ago, she and three neighbors collabo-
ratively bought a specialized drill, which Green
needed this season to seed only 100 acres of
alfalfa.
“Our share is $35,000 instead of $140,000,”
she said.
She and her neighbors also bought a machine
to lay drainage tile on low areas of fi elds that
sometimes fl ood. It’s nice to have but wouldn’t
be worth buying on her own.
“We can’t do much about the price of com-
modities, but where we can control a little bit is
our inputs,” Green said. “If you want to stay in
business, you have to watch your inputs and try
to be as effi cient as you can be.”
Sid Freeman, a Canyon County, Idaho, farmer, sprays a field for a neighbor on June 8. In turn, his neighbor plows fields for Freeman. Sharing equipment has saved both
growers tens of thousands of dollars.
Sean Ellis/Capital Press
W hile other n ew spa pers give you less, The D a ily Astoria n
GIVES
YOU
O u r n ew
M ORE
C APITAL B UREAU
From left:
M a teu sz Perk ow sk i,
Pa ris Achen
covers the sta te for you