Machinery and equipment are major cost items for a farming business, having increased over time with larger machines, new technology, higher prices for parts, new machinery, and higher energy prices.
The costs of owning and operating machinery can be divided into two categories, namely fixed costs and variable costs. Fixed costs relate to machinery ownership and occur regardless of whether the machinery is used or not. Variable costs relate directly to the amount of usage of the machine and include factors such as repairs and maintenance costs, fuel, and lubricants. The focus of this article is on the cost of repairs and maintenance, specifically looking at the cost of new machinery parts. Repair costs usually occur because of routine maintenance, wear and tear, and accidents.
Some of the fast-moving John Deere part prices are recorded at least twice a year on the Grain SA database for different regions. In addition to affordability, the availability of these parts is very important as it impacts a producer’s productivity on the farm, especially during peak seasons. The trend that has been selected for analysis is between 2016 and 2022, as the period prior does not have consistent data. The prices were averaged out over the six regions where data were collected.
Table 1 shows twelve fast-moving parts that have been tracked and recorded over the years at five-year intervals. For the first five-year period of 2011 to 2016, there are major jumps in prices, with most parts increasing by more than 100% and some by close to 200%. The parts that increased the least showed a 13,3% increase. The next five-year interval of 2016 to 2021 shows increases to a lesser degree, with the highest being less than 50% and two parts even showing decreases.
Change in machinery part prices over time
In the following section the change in different machinery part prices from August 2016 until May 2022 can be seen. The machinery parts range from ball bearings, bushings, tubes, oil filters, cradles, pin fasteners, discs to fingers (Graph 1 to Graph 7). Graph 1 indicates two sets of ball bearings – there has been an upward trend for both these items. The JD 9429 has increased by about 46% in the past five years, while the JD 8669, has increased by 56% in the same period. Graph 2 shows the price trend for a tube, which has increased by 36% since 2016. The cradle (Graph 3) shows a 52% increase since 2016, while Graph 4 indicates two sets of pin fasteners, which also show a moderately increasing trend. The R 49971 increased by 60%, while the L 26937 increased by 68% in the past five years. Two types of oil filters have been graphed on Graph 5, with one showing minor changes. The AL 156625 increased by only 5% since 2016, while the AL 112936 increased by 34% over the same time. Graph 6 indicates two sets of discs, where the AA 60534 increased by 74% while the DJ 11864 moved sideways with only a 1% increase. The bushing (Graph 7) increased by 39%, while the finger (Graph 8) decreased by 1% during the five-year period.
The article gives a broad overview of the price changes of twelve fast-moving machinery parts that Grain SA have monitored over the past few years. South Africa’s annual inflation target range is between 3% to 6%. Given the steep increases in machine part prices, it is clear that the majority of the parts as indicated in the graphs has increased above the ceiling of the inflation rate. Grain SA will continue to monitor the price changes of the listed machinery parts.