Wednesday, March 7, 2012

Diesel prices continue to climb

At farm shows across North America recently, we kept hearing one complaint over and over: rising fuel prices. And it seems no relief is in sight.

According to the AAA Fuel Gauge Report, the national average price for diesel fuel is $4.087/gallon (as of 3/7/12). Even more staggering, that same national average has not dropped in 40 straight days.

This isn't good news for farmers who use a pull-type sprayer. Pull-type owners use twice as much diesel fuel dragging their sprayer with a tractor. The added fuel being burned comes from the weight of the pull-type sprayer being pulled and the overall high horsepower, heavy tractor necessary to pull the sprayer itself.

The same additional diesel fuel costs can be said for hydrostatic sprayer owners too. Compared to an Apache sprayer, hydrostatic sprayer weigh anywhere from an additional 3,000 to 9,000 lbs. A heavier sprayer needs more fuel to burn with so much added weight of wheel motors, pumps and hoses.

Wednesday, February 22, 2012

Self-propelled Sprayer R.O.I. - Part I

Equipment Technologies E-Newsletter

Self-propelled Sprayer R.O.I.

Part I: Pull-behind vs. self-propelled sprayer:
Five things you need to know before you buy

In part one of this two-part white paper, we will explore the five most relevant factors you need to look at when comparing a pull-behind (PB) to a self-propelled (SP) sprayer. We are starting with this comparison because in order to understand the R.O.I. of a SP sprayer, you must first understand why it is superior to alternative application methods, particularly pull-behind sprayers.

Unless you already own a SP sprayer, you are likely in one of two camps: you either own a PB sprayer or you hire custom applicators. In reality, you may be doing both. As you contemplate owning your own sprayer, you intuitively know that a SP sprayer would be better to have on the farm and be far more efficient than a PB, but at what cost? And, most importantly, at what return?

So, naturally, your first decision point is: can I afford it? The answer, believe it or not, is likely yes. As with all capital investments on the farm, you need to consider the impact the decision will have on your total operation. These five factors will help you do just that.


1. Tank capacity does not equal productivity

The old adage that bigger is better is simply untrue when dealing with tank size. A 750 gallon product tank on a SP sprayer can actually be just as productive as a 1,200 gallon product tank on a PB. It's all about the amount of ground you cover in a specific amount of time. Think about it – a PB will be travelling at speeds roughly 60% of the SP sprayer.

"There is a bit more to it than that," according to Equipment Technologies Sales Manager, Nick Smith. "Speed relates to nozzle selection, which relates to the amount of product that gets sprayed. So not only are you moving faster in a self-propelled sprayer, but you're applying chemical far more efficiently. Flow rate aside, the issue of speed is very compelling by itself." Smith backs up this statement with a simple math equation that gives his customers an idea of the acreage covered in an hour in a SP vs. a PB sprayer:

Speed (MPH) x Boom Width x 5280 (ft. in a mile) / 43,560 (sq ft. in an acre) = Acres Sprayed in 1 Hour


So let's take for example a self-propelled sprayer running at 12 mph and a pull-behind running at 7 mph, both with 90 ft. booms.

Self-propelled: 12 mph x 90 ft boom x 5280 / 43,560 = 130.91 acres sprayed in an hour


Pull-behind: 7 mph x 90 ft boom x 5280 / 43,560 = 76.36 acres sprayed in an hour


2. Hidden operating costs of a pull-behind

If you're talking about comparing the costs of operating a PB vs. SP sprayer, the fact is many of the costs for a PB are hidden which creates the illusion that it is more cost efficient to operate. Conversely, the costs for a SP are right out in the open so they are often perceived as being greater. Here is a list of some of the hidden costs of a PB:

Fuel consumption

This cost is generally related to the fuel being burned by the weight being pulled plus the overall high horsepower, heavy tractor needed to pull weight of a PB sprayer.

Compaction

When comparing the gross weight of a tractor plus a PB sprayer to a SP sprayer, the weights of the tractor and PB will always outweigh a SP sprayer. This leads to a far greater compaction of the soil, which spawns more hidden costs like poor root growth, poor drainage, etc.

Crop damage

The issue of crop damage can be blamed on two likely culprits: the extra set of tire tracks from the tractor and PB sprayer and the low crop clearance of the PB.

Labor and custom application

If you take the point about the amount of acres covered in a hour and spread that cost out over a week or two, then related to the hourly wage of hired help or your own time for that matter, you really start to see how much money can be saved by cutting the time in half. Also, labor could include external help as well. For example, hiring custom applicators to do late season work because the low crop clearance of a pull-behind would almost certainly damage your crops. And, a lot of custom that gets done for growers with pull-behinds because they run out of time to get it covered due to inefficiencies as well as the previously mentioned clearance issue.

Lost productivity

What else could your tractor be doing while it is dragging a PB sprayer all of over your farm? A SP sprayer is an efficiency multiplier in the sense that it not only saves time and money, but it frees up your tractor for other work to be done.

3. Comfort and technology have their costs as well


Today's SP sprayers offer far more creature comforts than those of just a few years back. They are designed for full visibility of your booms and offer fully integrated precision options that are specific to spraying; the precision options are ergonomically laid out in the cab for maximum comfort and productivity. Conversely, many PB owners have retrofit their precision spraying equipment into a tractor that is generally not as comfortable as today's SP sprayer. This combination creates a pretty long day of bouncing, reaching and straining as the operator tries to keep an eye on the booms all while working the precision equipment and driving the tractor.



4. You might be lying to yourself about acreage


"We talk to a lot of growers that have between 1,200 and 2,000 acres that don't feel they can justify or afford a SP sprayer," says Mike Flatt, General Manager of Illini Sprayer Company in Oreana, Ill. "The truth is that 2,000 planted acres generally equals at least anywhere from 4,000 to 6,000 application acres." So, when you look at the application acres vs. planted acreage of the farm and combine them with the pull-behind's hidden costs of extra fuel consumption, compaction, crop damage and lost productivity, you really start seeing how easy it is to justify the cost of purchasing and operating a self-propelled sprayer.

5. Yield is almost certainly going to be higher with a self-propelled sprayer


Most near and dear to any grower's heart is the impact a farming change will have on yield. According to Nick Smith, "The growers we talk with indicate an increase of at least 1% in yield when going from a pull-behind sprayer to a self-propelled because of a number of factors including reduced crop damage, reduced compaction and a generally more timely application." Smith goes on to explain that his company, Equipment Technologies, which manufactures the Apache Sprayer has developed a tool that calculates the difference in R.O.I. between a pull-behind and self-propelled sprayer. Smith mentions, "The yield increase information is what makes the comparison a slam dunk for a self-propelled sprayer. In fact, when ET does the analysis, we typically only put the increase in yield at .4% just to show that even with conservative estimates, it costs no more to own a self-propelled sprayer than it does a pull-behind and it most likely will make you money faster."


 

Intersted in a self-propelled sprayer cost of ownership analysis? Contact Nick Smith, Sales Manager and Equipment Technologies. Nick's team has developed a proprietary tool that analyzes your increase in yield and factors in the costs associated with either a pull-behind sprayer or hiring a custom applicator compared to the purchase of an Apache sprayer.

(866) 463-0452 or nick.smith@etsprayers.com


Monday, January 16, 2012

ET named Application Product of the Year again




MOORESVILLE, Ind., January 16, 2012—At a luncheon held at the 20th Annual National No-Tillage Conference, Equipment Technologies was given the Application Equipment Category 2011 Product of the Year Award for its AS720, AS1020 and AS1220 models of self-propelled sprayers. This marks the second consecutive year Equipment Technologies has received this national recognition from No-Till Farmer readers.        

"This is an impressive accomplishment for these companies’ products to be recognized as top performers by our readers,” says Darrell Bruggink, executive editor and publisher of No-Till Farmer. “No-tillers probably have the most critical eye when it comes to the performance of products, as they put them through challenging conditions. These manufacturers should be very proud to have received this recognition from our readers.”

According to CEO of Equipment Technologies, Matt Hays, “We love no-tillers. To receive this award two years in a row now further validates the Apache as the businessman’s sprayer. No-tillers are focused on growing the value of their operation over the long haul and know how to invest accordingly, that’s why the 20 Series Apache sprayer and no-till practices go hand-in-hand. I would also like to emphasize that our product is the result of a continual team effort from our employees, dealers and customers to have the very best product possible.”

Equipment Technologies is the largest independently-owned manufacturer of self-propelled sprayers in North America. Operating from its 146,000 square foot headquarters in Mooresville, Ind., the company distributes its sprayers throughout North America, Ukraine and Australia through a network of independent dealers.




Thursday, January 5, 2012

AS1025 - New Name, New Engine


The EPA has set emission targets in the United States, Canada and Europe for the reduction of Nitrogen Oxide (NOx) and Particular Matter (PM). The reduction in PM and NOx is being implemented using a two prong approach. The first step is called Tier 4 Interim and the second step is called Tier 4 Final. Tier 4 Final in 2014 mandates a 90% reduction in PM and NOx compared to today's current Tier 3 regulations.

Starting January 1, 2012 the AS1020 model will be known as the AS1025 and will be powered by a Cummins Tier 4 Interim engine (as seen above). Cummins began field tests in June 2008, and surpassed an overall 20,000 hours of operation in January 2010.




What features come with Tier 4 Interim?

• Exhaust Gas Recirculation (EGR)
• Variable Geometry Turbocharger (VGT) –boosts response at all engine speeds
• Clean crankcase filter- removes crankcase emissions for ultra-clean engine operation
• New CM2250 engine controller – 3x faster processing power – 2x increased memory capability
• Enhanced Engine Filtration
• High Efficiency Combustion

How does Tier 4 Interim benefit you?

• "Fit and forget" maintenance free compact catalyst
• Retain same oil change intervals as Tier 3
• Simple 2,000 hour crankcase filter element change
• NO urea injection after treatment
• NO Diesel Particulate Filter (DPF)
• NO dual turbochargers
• NO regeneration cycle required

Why ET continues using engines produced by Cummins?

We went with Cummins because of our long-standing confidence in them. They have the most experience having already adressed confidence in "on-highway" engines. They are extremely dependable and have the capability for system integration, design and manufacture from air-in to exhaust-out. Cummins is unique in the industry because they design, build and integrate the complete system: filtration, diesel exhaust fluid, direct flow, electronic controls, combustion technology, fuel systems, turbochargers, after treatment system and filtration.

Monday, December 19, 2011

FOLLOW UP: Tax Incentives for 2011


Since our post last week, Tax implication clock is ticking for farmers, we've received a lot of tax code questions. Below is an example how growers can save significant money on their tax bill.

As a reminder, The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 contains tax savings specific to the purchase of equipment that are set to be dramatically reduced at the end of the year:
  • Through December 31, 2011, for new equipment purchases, 100% of the cost can be written off. This is actually 100% bonus deprecation and it is not capped or limited. In 2012, the program returns to 50% bonus depreciation.
  • For used equipment, the section 179 (one time write off provisions) limits are $500,000, with phase out beginning at $2,000,000.
Example for New Equipment:
Cost of Equipment
$500,000
   100% bonus depreciation (new only)
$500,000
   Section 179 Deduction (new or used)

   Normal 1st year depreciation

   Total 1st year depreciation
$500,000
   Cash savings on your equipment purchase (assumes 35% tax rate)
$175,000
Lowered cost of equipment after tax savings
$325,000

Example for Used Equipment:
Cost of Equipment
$500,000
   100% Bonus Depreciation (new only)

   Section 179 Deduction (new or used)
$500,000
   Normal 1st year depreciation

   Total 1st year depreciation
$500,000
   Cash savings on your equipment purchase (assumes 35% tax rate)
$175,000
Lowered cost of equipment after tax savings
$325,000

So, on a $500,000 purchase, our government is essentially handing you back $175,000 in year 1, instead of spreading that amount over the depreciable life of the sprayer.  

Monday, December 12, 2011

Tax implication clock is ticking for farmers

(Photo from withholding-tax-refund.com)

For tax purposes, farmers are busy this time of year finalizing deals on new equipment due to the ability to write off specific capital purchases. Previsions in the federal tax code, such as Section 179, give farmers the choice to deduct either part or all of new assets placed in service this year.

Here is an article from the Dairy Herd Network on the importance of taking advantage of these tax incentives.

Wednesday, December 7, 2011

Farm Bill moves to 2012

There was hope the Super Committee would take care of the Farm Bill during negotiations this past month. However, nothing was addressed and talks will move into 2012.

Congress left on the table numerous funding cuts to Natural Resource Conservation Service programs. These NRCS programs help farmers protect, conserve and enhance their land.

Now the waiting game is on to see what action Congress will take. Below are two links to stories on the upcoming Farm Bill outlook for 2012.

AgWeb | Lawmakers Hopeful for a Farm Bill in 2012
Hoosier Ag Today | Farm Bill Negotiations moves to 2012