U.K. Update: Investing in new metal
Purchasing new drainage equipment is a big decision.
December 6, 2019 ByRob Burtonshaw
At some point all contractors must be brave, bite the bullet and dig deep to invest in new metal. Machinery of all types, especially drainage machines, lighten the pocket. They are sophisticated and complex machines and as such do not come cheap. Any investment is a risk and cannot be taken lightly.
There are many persuasive reasons just to carry on with the old machine. No one has a crystal ball and, in our business, demand can move quickly in both ways. The price of agricultural commodities bounces sharply and I remain amazed about how few orders we received in a drought and how many we received when the heavens open up. Our customers are making an investment, which we all hope will last at least 20 years, but last month’s weather seems to be a critical part of the decision-making process for farmers. None of which we can control.
In the past, we have taken the option to try and squeak out a few more years from our existing assets by sending them back to the manufacturer for an overhaul. This has been motivated mainly by the cost of replacement and, in fairness, has worked well but delays the inevitable. I’m sure there are exceptions but the older the machine the more likely it is to break down and the harder it is to repair.
Our workload is not spaced out neatly over the course of the year. Often crops are standing or the ground is too wet. For a few months after harvest every day counts as two and a breakdown, especially one which takes time to repair, can have a noticeable impact on profit. Eventually you reach the point when the risk of breakdown becomes a factor in your decision making.
“[A]fter harvest every day counts as two and a breakdown, especially one which takes time to repair, can have a noticeable impact on profit.”
So, the time has come and we have recently taken delivery of a new Mastenbroek 40/20 drainage plow. It is a big step up for us and we have taken our time thinking it through. The last couple of years have been reasonably good, so a case for investment can be made. The availability of a European Union business investment grant certainly helped. However, the counter argument is strong too, here in Britain, as I’m sure you know, we are experiencing a time of political turmoil. No one knows what will happen. Maybe nothing. Maybe the biggest change to agricultural policy in 70 years. It is hardly the ideal backdrop to make one of the largest investments a drainage contractor can make.
Investing has a cost but so too does not investing, it’s just less visible.
Ultimately, I feel that we cannot stand still. The easy opinion is to wait and see, but every month and year we wait we fall further behind. Investing has a cost but so too does not investing, it’s just less visible. The difference in performance from our old machine to our new machine is stark. We are quicker and more efficient than ever before and if things take a turn for the worse, being more efficient can only help. Any investment is a risk but I believe that a contractor has very little choice but to invest. Yes, this investment needs careful consideration. Yes, it must not be reckless but at some point it has to be done. We have made this brave decision. Time will tell if it is the right decision.
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