A web mobile application for agricultural machinery cost analysis


Does mobile technology have a place in the agricultural sector?

Nevertheless, in the agricultural sector there is a slow adoption in the use of mobile technology compared to other business domains ( Sørensen and Bochtis, 2010, Xin et al., 2015 ).

How much does farm machinery cost per acre?

Making smart decisions about how to acquire machinery, when to trade, and how much capacity to invest in can reduce machinery costs as much as $50 per acre. All these decisions require accurate estimates of the costs of owning and operating farm machinery.

What are mobile mobile web and native apps?

Mobile web and native apps are technology challenges to deliver cross-platform (F5.1 and F5.2 of QFD analysis) apps.

How much does farm machinery insurance cost in Iowa?

Current rates for farm machinery insurance in Iowa range from $4 to $6 per $1,000 of valuation, or about 0.5 percent of the average value. There is a tremendous variation in housing provid­ed for farm machinery.


Ownership Costs

Depreciation is an expense that represents the loss in value of equipment due to age, wear, and obsolescence. The annual cost spreads the initial purchase cost across the useful life of the equipment. There are several techniques for calculating depreciation including methods used for income tax preparation.

Example Calculation

To illustrate the machinery cost calculations for a tractor plus implement, this example uses a 190 hp four-wheel-drive tractor with a 32-foot field cultivator. Table 3 shows the initial information. The tractor has a list price of $200,000, purchase cost of $189,000, expected useful life of 20 years, and estimated annual use of 400 hours.


Because farm equipment is such a large capital investment for a farm business, managers should carefully analyze the costs per hour and costs per acre for equipment and for field operations.

What are the two categories of farm machinery costs?

Farm machinery costs can be divided into two categories: annual ownership costs, which occur regardless of machine use, and operating costs , which vary directly with the amount of machine use.

How long do farm machines last?

A good rule of thumb is to use an economic life of 10 to 12 years for most farm machines and a 15-year life for tractors, unless you know you will trade sooner.

What is the economic life of a machine?

The economic life of a machine is the number of years over which costs are to be es­timated.

What is ownership cost?

Ownership costs (also called fixed costs) include depreciation, interest (opportunity cost), taxes, insurance, and housing and maintenance facilities. Depreciation. Depreciation is a cost resulting from wear, obsoles­cence, and age of a machine.

What are the major cost items in farm business?

Machinery and equipment are major cost items in farm businesses. Larger ma­chines, new technology, higher prices for parts and new machinery, and higher energy prices have all caused machinery and power costs to rise in recent years.

Is machine service tax deductible?

If a machine is purchased, all variable expenses except unpaid labor are deductible when determining income tax liability. Housing expenses, taxes, insurance, and interest payments made on a loan to finance the machine purchase are also tax deductible.


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