Features Business Policy
Survey: Farmers plan to spend more for equipment

May
17, 2010, Regina, Sask – Like land, equipment is a major asset required by agricultural
producers and agribusiness owners. Forty-two per cent of them
who responded to a Farm Credit Canada survey plan to increase spending on
equipment in 2010.

May
17, 2010, Regina, Sask – Like land, equipment is a major asset required by agricultural
producers and agribusiness owners.

Forty-two per cent of them
who responded to a Farm Credit Canada survey plan to increase spending on
equipment in 2010.

FCC Vision Panel survey findings can be found at www.fccvision.ca/research
in the following reports: Impact of Economic Conditions on Canadian Producers
and AgriBusiness and Farm operations –
pooling resources. The survey was completed in November 2009 by more than 900 producers
from across the country.

“We created the survey to
learn more about equipment purchasing trends because we lend money for
equipment to producers and agribusiness operators directly and through our
relationships with over 700 equipment dealers across Canada,” says Darren Bly, FCC vice president of
partners and channels. “What we didn’t
see was a large decrease in planned spending compared to 2009. This was a bit
of a surprise since increased commodity prices in 2008 helped drive record
sales that year.”

While 42 per cent will
spend more on equipment, 45 per cent are not planning any change in spending
and 14 per cent stated they will spend less. Quebec producers (21 per
cent) are significantly more likely to state that they plan to decrease
spending on equipment than producers from Alberta (8 per cent), British
Columbia (6 per cent) and Ontario (9 per cent).

The survey also asked
primary producers about equipment ownership. Nearly three-quarters of
respondents (74 per cent) own their equipment and 14 per cent own some
equipment and rent the rest. Interestingly, over one-third of producers (37 per
cent) share one or more pieces of equipment with a neighbour. Producers from
Quebec (48 per cent) are significantly more likely to do this than producers
from other provinces: Alberta (32 per cent), British Columbia (25 per cent), Saskatchewan
(33 per cent) and the Atlantic provinces (29 per cent).

“The average amount of an equipment
loan at FCC has increased in the past two years from approximately
$70,000 to $76,000,” says Bly. “Sharing equipment may be a good business
decision as the cost of equipment increases and producers seek alternative ways
to save. FCC has responded by creating a leasing
program for farm equipment. It’s really important that producers
have the right equipment for the job. They need to do their homework to assess
when they should replace equipment at the most cost-effective time for their
operation.”

For more information, visit www.fcc.ca.