Farm Progress

Profit Planners: Should you buy trucks or hire a custom hauler?

Tom J Bechman 1, Editor, Indiana Prairie Farmer

April 3, 2017

3 Min Read
BUY OR HIRE? Whether you own trucks or hire a grain hauler may depend on what fits your operation best in both the short term and the long term.

My former partner and I parted ways this winter. He owned the semis and hauled the grain. I need to either buy semis or contract with someone to do it. I typically haul to an ethanol plant 15 miles away, but sometimes the price is better 50 miles out. Should I buy new trucks or used trucks, or line up a custom hauler?

The Profit Planners panel includes: David Erickson, farmer, Altona, Ill.; Mark Evans, Purdue University Extension educator, Putnam County; Steve Myers, farm manager, Busey Ag Resources, LeRoy, Ill.; and Chris Parker, livestock and forage producer, Morgantown, Ind.

Erickson: If you have labor available to operate your own trucks, that could be a reasonable approach. See how this fits into your current business plan. If you need to add labor and buy trucks, the expense could be overwhelming. You could utilize the services of a custom hauler to fill additional needs and reduce your startup expenses in this new enterprise. Both options must be evaluated as a part of future profitability for your business.

Evans: Lines at the elevator and time to dump are usually a huge issue that should be considered for time and travel. You will have to consider the transportation cost vs. the better price 50 miles away. Premiums for certain times may drive that decision so you use a combination of the locations. If you want more control, buy the trucks so you can manage better.

Myers: It could be yes, yes and yes to all three options — buy new, buy used and custom hire. In the short run, you have the option of having the hauling custom done, which may not be as profitable for you but accomplishes the task. The two longer-term options to buy new or used trucks is a decision subject to available capital, labor and repair expertise on trucks, especially if you would opt to buy used trucks.

You may even throw into the mix the option of leasing a unit instead of buying a truck outright. I suggest you start small and simple, getting comfortable with the basics of what will become a trucking enterprise. Then you can continue to tweak your operation as your knowledge level increases.

Parker: Not knowing your financial situation after this partner split, I would lean toward using a custom hauler the first harvest post-split. Then you can make plans to incorporate used trucks into your budget and into the operation in the future. Of course, this is assuming you have a reliable custom hauler available in your area. 

Summing up: The breakup of the partnership is really a bigger deal than just deciding how you are going to get your grain to market in the future. How else did it affect you financially? Did you lose some ground in the split? Do you have labor available that is competent to drive a truck, if you go that route?

The consensus seems to be that you should move slowly at first, and see how a decision about hauling grain is going to fit in with the rest of the decisions that must be made in your operation. You’re really starting a new business as a sole proprietor, so there could be many other decisions that weigh on this particular decision about how to haul grain.

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About the Author(s)

Tom J Bechman 1

Editor, Indiana Prairie Farmer

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