“Collectables” are items that may have been commonplace or inexpensive at one time, but have now become sought-after. They actually gain considerable value over time: baseball cards and vinyl records come to mind. Other, similar items might have no value despite having been saved and tended carefully over decades.
Not so with farm equipment. It loses value the minute it is put into service, and within a year of owning it generally drops in value by half. Farm equipment gets used hard, exposed to dirt and weather for many hours even in a single year. It is difficult and expensive to transport, and while it’s valuable to the farmer who buys it, most other people have little use for it.
This drop in value is called “Depreciation”, and it is considered an expense that businesses can use to offset profits on their tax returns. But farming is not a particularly profitable business, and farmers have little need of additional tax write offs. are thrifty and tended to buy equipment infrequently and take very good care of it to make it last as long as possible.
But several decades back, companies like banks and manufacturers figured out that they could take advantage of depreciation to lower their taxes, while improving their business. Instead of loaning money to farmers, they would buy the equipment themselves, rent it back to farmers, and use the depreciation to lower their taxes. The farmers don’t have to put up as much capital to gain access to the tools that they need, and they get new stuff to use every few years. And they don’t have to choose between two pieces of equipment because you can only afford to buy one. Thus was born “Leasing”.
Terra Firma takes advantage of leasing to gain access to critical equipment that is very expensive, for example, our refrigerated delivery trucks. But due to diversity of crops we grow, many of our tools don’t get used often enough to justify the cost of leasing new ones. Instead, we are constantly on the hunt for “uncollectables” — items that were very valuable when they were first purchased, but are now almost worthless from a financial perspective, their value having been depreciated. They are also practically useless to almost everyone — except to a handful of farmers.
But to a farmer who uses it, a well-built and well-cared for farm equipment is almost never worthless. On just about any farm, you will find machinery has been maintained and repaired for 20, 30, 40 and even 50 years. To the average person, it may look like “rusted junk”, but it still works just as well as it did when it was new. On our farm we have dozens of these “un-collectables”.
We use one such piece of equipment when washing our root vegetables. We have a washing system that uses a large metal barrel to gently rolls the roots down a gentle sloping cylinder of perforated metal while they are sprayed with clean water. The barrel washer itself is fairly new, it’s still even shiny. But the roots are first soaked in a large, slope-sided 250 gallon water tank with a belt that lifts the roots out and drops them into the washer.
The fifty-year old soak tank is an “un-collectable”, originally made for soaking walnuts during the process of removing their hulls. We did not buy the tank from the walnut grower who first used it, but rather from another vegetable grower who adapted it to for use with potatoes. We bought the tank from him, third-hand. The soak tank lasted for probably 50 years, 10 of those on our farm. It finally began to fail last year despite our efforts to repair it.
Like most farm equipment, the soak tank is not something you can order on Amazon or have delivered by UPS. I found two manufacturers on the internet that make them, one in Texas and the other in Canada. The price was quite a bit beyond our budget, and that was before the cost of shipping the tank — which weighs a thousand pounds — was included.
Having checked the “World Wide Web”, I then cast about on the “Winters Web”, asking around to see if anyone knew anyone who might have another old walnut soak tank — hopefully in better shape than the one we were currently using. I was steered in the direction of one of our immediate neighbors, a walnut grower who had just retired and was confronting the task of selling off all his old equipment. He took me for a tour of his now-shuttered facility, and there it was — way back in the weeds and long-abandoned but perfect for our use.
Indeed our “new” soak tank is better than the old one: it is almost four times as large, easier to clean, and is an updated model as it’s “only” thirty years old rather than fifty. I am certain it has at least twenty years of use left in it. And the price was a fraction of what a new one might have cost, with the benefit of it being 100% recycled with a much lower carbon footprint.
Thanks,
Pablito