Machinery-Sharing Contractual Issues and Impacts on Cash Flows of Agribusinesses

Jared L. Wolfley, James W. Mjelde, Danny A. Klinefelter and Victoria Salin ()

No 285218, Reports from Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center

Abstract: Contractual arrangements for joint machinery ownership between independent agribusi- nesses are explored. A two-farm economic simulation model of locations in Texas, Colorado, and Montana is developed to provide insight associated with sharing combines. Important variables include combine size (efficiency), yield losses resulting from untimely access to equipment, the penalty structure for untimely delivery, and cost-sharing and depreciation deductions claimed between producers. Combine sharing is risk-reducing in most cases. The gains to both parties are lowest when harvesting periods overlap. While the value of sharing is positive under many scenarios, benefits from sharing are small relative to total farm revenue.

Keywords: Agricultural and Food Policy; Farm Management; Financial Economics (search for similar items in EconPapers)
Date: 2011-04-01
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Citations: View citations in EconPapers (1)

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Journal Article: Machinery-Sharing Contractual Issues and Impacts on Cash Flows of Agribusinesses (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:tamagr:285218

DOI: 10.22004/ag.econ.285218

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