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Does second combine purchase or extra grain bin make more sense in tough times?

Does second combine purchase or extra grain bin make more sense in tough times?
Profit Planners: If budget will allow for one but not both, does a combine or a grain bin make more sense?

Question from a farmer: We’ve got enough money budgeted this year to do one of two things, but not both. We could add a second, used combine to speed up soybean harvest. Right now we harvest 2,200 acres with one machine. Or we could add a new grain bin to our setup. We were 20,000 bushels short on storage space even last year. Where would our money be best spent?

BUILD THE BIN: The Profit Planner panel sees better chances for increasing income from buying a new grain bin vs. a second combine, if you can’t buy both.

David Erickson, farmer: You really should be in good shape with one combine for 2,000 acres, unless there are some extreme circumstances. Perhaps study the possibilities of making more efficient use of your combine for this fall. The purchase of the grain bin makes sense if it provides a return to your operation. Will it speed up harvest, reduce out-of-pocket storage costs and improve marketing opportunities? If yes, then the grain bin addition might be best for you.

Mark Evans, Extension educator: The storage option would seem to be the best option, and it could help provide income for the second combine or a larger combine to cover 2,000 acres later. Markets will be tricky during the next several years, and storage may be important to take advantage of key marketing opportunities.

Steve Myers, farm manager: Questions like this are a perfect time to use a partial budget that asks the question, ″What are the added costs and reduced returns as well as the added returns and reduced costs to adding a combine, as compared to asking the same questions in regard to building the grain bin?″ That math should give you a quantifiable number to add to the conversation.

Chris Parker, beef and hay producer and retired Extension educator: If you are in farming for the long term, the grain bin is the way to go. It will help alleviate the current on-farm storage deficit and allow for a better yearly commodity price average. It also accommodates potential future growth. The extra combine can come later, with a combine leasing or custom harvesting from a neighboring farmer filling in until then, if necessary.

Summing up: The panel strongly favors investing in the grain bin since it is more likely to help you attain a better price for your grain when selling prices are averaged over time. It gives you more flexibility in marketing, which could allow you to impact income directly in a positive way. Don’t give up on the idea of the second combine, though. Work it into your plan as money allows.

Does second combine purchase or extra grain bin make more sense in tough times?

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