Farm News, IA
02-21-07
Workshop tackles farm machinery sharing
By Randy Mudgett, Managing editor
FORT DODGE
— When a 10-year-old tractor sells for $85,000 or a used combine a couple of years old sells for $172,000, people begin to think that their small farming operation needs a partner.
Nearly 50 people attended a machinery sharing workshop last week at the
Webster County Extension office in Fort Dodge to listen to ideas. At issue was not whether farmers could save money in a relationship with one or a group of other farmers, rather personalities and financial worth surfaced as the key ingredients to a successful farming partnership.
‘‘Personalities are the key,’’ said
William Edwards, an Iowa State University
Extension ag economist . ‘‘Making agreements that a group of farmers can agree upon are the hard part.’’
Several examples of successful partnerships were noted and examined by the group. Kelvin Leibold, Extension farm management specialist from Hardin
County , said while a farming partnership can save producers about $30 an acre in costs, often finding someone who shares the common goal is just the first hurdle in the partnership.
‘‘People tend to look for someone who is honest, trustworthy, financially sound, a good recordkeeper, flexible and a ha rd worker,’’ Leibold said. ‘‘Often these relationships either connect or turn into fist fights and dissolve.’’
A number of partnerships have become successful for other farmers including something as simple as sharing a combine. However, the producers must agree upon which field is combined first, and which is combined last. ‘‘That is where the trouble begins,’’ Edwards said. ‘‘There has to be a set agreement made and then the farmers must be flexible in their decisions as things can change during the cour se of a growing season.’’
Close to home
During the workshop, the attendees were asked for traits they would seek in finding a partner for their farming operation. Not surprisingly, the group said they would try to find a neighboring farmer to share machinery with if given the choice.
However, something as simple as the choice of color of a combine can end the discussion once two farmers decide to partner.

‘‘There must be an operating agreement written out, one that the parties can agree upon, one that is legal and one that gives the parties the opportunity to dissolve if it doesn’t work out,’’ said Edwards. ‘‘We have seen some complex agreements where all the farm machinery is shared, and we have seen some simple agreements between parties that just share a tractor. The key is in the relationship.’’
Once an agreement is reached by the parties there are still a few hurdles to cross including farm payment eligibility and income taxes. Some partnerships are formed as a general partner while others may form a limited liability company or
LLC. Extension can help partners take the first steps toward an agreement with its Ag Decision Maker software program (www.extension.iastate.edu/agdm/) which can help producer decide what machinery is needed if more acres are worked into an operation.
Other basic decisions in a partnership include establishing an operating fund for repairs, crop inputs, licenses or fuel. Leibold said often maps are used to identify the field or farm the partnership refers to in order to make decisions on where to plant certain varieties in order to keep costs lower during harvest.
‘‘Partners need to remain flexible at harvest time,’’ Leibold said. ‘‘Sometimes rain may have affected one farm while not affecting adjoining land so the group should appoint a field boss to decide the day-today operation decisions.’’
Keeping accurate records in complex farm machinery sharing relationships is often the key to maintaining the partnership. Edwards said if one farmer works more hours than another or one contributes more fuel or an extra truck, hard feelings can crop up quickly.
‘‘We have seen examples of partners basing their partnership on acres, hours or machine,’’ Edwards said. ‘‘If one farmer has slightly newer tractor that is used more hours while an older tractor is used less in the same field, problems occur so these agreements must be made in advance.’’
In the end, once a machinery sharing agreement is accomplished, and all the problems between the parties are either discussed or resolved, a machinery sharing agreement means producers can likely make more money utilizing newer equipment that improves productivity on the farm. The result can be a successful venture that lasts for years, or one that ends abruptly.
‘‘The costs of owning and operating farm machinery makes up about 30 to 40 percent of the per acre cost of farming in Iowa,’’ said Roger McEowen, Extension economist. ‘‘A successful partnership means a more efficient farming operation for the parties involved plus a partnership means that smaller farms have the

opportunity to take advantage of technological changes that often only large farms enjoy.’’
Edwards said, ‘‘Farming years ago used to be about people working together to accomplish a goal like the husking bees and the harvest crews of long ago.
Today, the same thing can happen if farmers work together.’’