Illinois farmer leasing equipment instead of buying

Leasing can offer lower payments and maintenance coverage

By Diego Flammini
Assistant Editor, North American Content
Farms.com

At least one farmer in Illinois is choosing to lease their farm machinery instead of buying as a way to keep costs down.

“The payments are lower than normal, and I have 100 per cent warranty coverage so I don’t have to worry about repairs or maintenance,” Andy Mason, who farms near Jacksonville, Illinois, told the Peoria Journal Star.

Mason said between 2012 and 2014, commodity prices were high and farmers used the extra income to update their machinery fleet; since then, commodity prices have dropped but equipment costs remain high.

“The equipment manufacturers can’t sell this stuff because they’ve overbuilt and oversupplied the market,” he said.

Rod Carls, store manager for Sloan Implement in Taylorville, Illinois, confirmed Mason’s sentiments.

“We’ve been doing more leasing,” he told the Journal Star. “Most of these leases are anywhere from three to five years and I hope the economy would start to rebound a little by then.”

Current data from the Association of Equipment Manufacturers also show slowdowns in tractor sales.

According to AEM, sales of tractors in the 100+ HP range are down nearly 33 per cent from 6,507 in March 2015 to 4,366 in March 2016; 4WD farm tractors are down almost 40 per cent from 848 in March 2015 to 524 in March 2016.