Millions spent on machinery

Spending on farm machinery in WA's wheatbelt has almost doubled in 10 years, with an average farm investing $1.1 million. This compares with only $600,000 invested in 2004.

Farmanco survey figures show an average of $110,000 has been allocated in the 2014 budget period for depreciation costs of 10 per cent, simply to maintain machinery values at the current levels.

These figures are based on an average Wheatbelt cropping program of just under 2700ha.

Farm consultant Eric Nankivell said this equated to $41/ha, as compared to 2004 when that same depreciation budget item was only $31/ha.

"So this means the amount of money that has to be allocated in the farm budget to machinery costs has increased significantly on a percentage basis," he said.

Mr Nankivell said two things had happened since 2004.

"The amount of money invested in machinery has almost doubled," he said.

"However, while the crop area has increased significantly, machines are also becoming more expensive."

Mr Nankivell said machinery price increases could be a direct result of rising costs of materials and production, with the added cost burden of reliance on coverage and variable rate technology.

"This sort of technology is now becoming a standard, but significant component of new machines," he said.

Mr Nankivell said while the increase in machinery expenditure was a concern, the clear message to all farmers was the importance of forward planning.

He said given many areas of the State in the past five years had lived through below-average seasons, some farmers would now be simply playing "catch-up".

"In the last five years, many farmers haven't been in a position to spend that budgeted allocation on machinery upgrades," Mr Nankivell said.

"So even though 2013 was a good year for many farms throughout the Wheatbelt, they may now be in the position where they have to spend upwards of $400,000 just to maintain or get back to their earlier position."

Mr Nankivell said the clear message was farmers could not have an ad hoc approach to machinery changeovers.

"Ten years ago, many farmers might not have had a really clear plan for the upgrade or change over of machinery," he said.

"But I could safely say that at least 80 per cent of my client base now has a structured and disciplined approach to machinery budgeting.

"This has the added benefit of giving the grower confidence in dealing with their machinery salesmen, knowing their full long-term budget position."