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Why 70 Euro?

Save SEK 700 / ha and year

The fact that the machines roll as they should when it is in season is the basis for creating profitability. Machines and implements that break down and come to a standstill always entail different types of costs, if not pure expenses such as repairs and spare parts, it is in the form of increased working hours, poorer production value of the crops and poorer resale value.

What can be done to prevent machines and implements from breaking down and coming to a standstill? The basis is to take care of the machines and make sure they get the care and care they need. Just as you need an animal eye and animal care when you have animals, you need a machine eye and machine care when you have machines. With the help of various industry statistics and business economic analyzes, Farmers First has made an assessment that the value of well-maintained and functioning machines amounts to SEK 500-1,000 per hectare or an estimated SEK 700 per hectare. The calculations are based on:

  • Higher production value: With functional and reliable machines and implements, the convenience effect is improved so that all work steps can be performed when it is at its most optimal. The assessment is that with reliable machines and implements, the production value can increase by 1-2% per hectare, which corresponds to approximately SEK 200 / ha. It may be that, for example, 10% of the area gets 10% better value, so it will be 1% of the entire area.

  • Lower cost of repair and maintenance: Well-maintained machinery and equipment tend not to fail. An assessment made by the workshops is that 50-70% of accidents can be avoided with preventive maintenance and thus reduce the costs for major accidents and repairs by about 10-20%, which corresponds to about SEK 200 / ha.

  • Higher resale value and longer service life: On average, the value of machines and implements is approx SEK 12,500-25,000 / ha and the reduction in value is around 12-16% annually, which corresponds to approximately SEK 2,750 / ha. Through better maintenance and care, the machines last longer and the resale value becomes better. The annual depreciation could fall 1-2% from, for example, 14% to 12-13%. For every percentage point that you can slow down the reduction in value, you save SEK 200 / ha. 1-2% reduced value reduction corresponds to approximately SEK 300 / ha.

 

A summary of the calculations shown below shows intervals of between SEK 500-1,000 / ha. For a farm of 250 hectares, profitability could be improved between SEK 90,000 to SEK 310,000 per year. We have compared our figures with the Swedish Board of Agriculture's calculations for the entire Swedish agriculture's approximately 2.5 million hectares of arable land. The total cost in Swedish agriculture for maintenance and repairs is estimated to amount to SEK 3 billion excluding own work, which is approximately SEK 1,200 / ha and also the machine investments per year are approximately SEK 8 billion, which is approximately SEK 3,100 / ha and year. Reconciliation with the national figures indicates that our calculations and conclusions are reasonable and that improving preventive machine maintenance has a great economic value and also reduces stress for machines that do not work when they should.