Anybody cost sharing on equipment anymore?

I am working on next year's plan and trying to determine the best move to make on equipment. I am eyeing a piece of equipment that I think will make a good return in a short amount of time. The trouble is this investment looks a whole lot better spread on quite a few more acres which are near impossible to come by. I can think of people to cost share with but also see potential problems.

I've not heard this term before , but I think you are expecting others who use your equipment to share in the expense of paying for it or paying for upkeep ?? If I'm wrong , please explain in better terms . My outlook on sharing equipment is never expect anyone to pay when they can get anything free .I've witness myself how others take care of someone elses equipment & its not good .Even family is sometimes quilty of the I could care less outlook . Many years ago , I lent my truck to my sister & BIL figuring they's bring it back with a full gastank & with no damages . Nope , it came back with a busted door glass , & neraly empty gas tank . When I demanded they replace the window , it caused a really bad relationship . Another time I lent a couple of my autobody equipment (DA sander + a full box of 4"x7" pads , & a paint gun). My items came back with some paint residue left in the paint gun & several of the sanding pads missing .They said they ran out of lacquar thinner so they couldn't clean the gun any better .They then made no offer to replace the pads they used or clean my gun properly .So my policy has been to lend nothing , that way I have no problems with my equipment . HTH ! God bless , Ken

I really do not think it ever comes out even, I would have one person own it, and rent it out if it comes to that.

It can be a slippery slope. I have over the years shared equipment. Some worked out good, others not so good. I still share a few pieces with a good neighbor/close friend. We do not actually share ownership of any one piece though. We each own our own equipment and share different pieces that the other does not have. Example would be I have good rakes and balers, he does not. He has good planters, I do not. We each have our own tractors and just "share" equipment back and forth. I have shared ownership with others in the past and not one of those deals ever worked out...

Casey in SD

I think to have any chance of working here it would have to be a formal understanding. Definitely not on the level of buying and loaning it out hoping to get something in return for the use.

Your thinking clearly. My neighbor has been here all his life. I've only been here 11 years. Our arrangement only started about 4 years ago when he must have finally deemed me "worthy enough"! Hahaha I upgraded my haying equipment and was running laps around him. He's a cash cropper with nice equipment. Hay is just a past time for him. He approached me about being for hire to do his hay. I suggested the equipment share as my row crop equipment at the time left something to be desired. He agreed and it's been working well since. My row crops are hobby compared to his and his hay is hobby compared to mine so it's all good.

Casey in SD

i think your best option is to buy it by yourself and hire yourself out (as in with you as the operator)

I USED TO TRADE BACK & FORTH WITH MY NIEGHBOR & BEST FRIEND.WORKED WELL BUT THEN HIS SON MOVED HOME & DECIDED THEY SHOULD OWN EVERYTHING THEY NEEDED. NEIGHBORHOOD STILL USES MY CALF CHUTE.BY NOW I THINK IT'S COMMUNITY PROPERTY.

My ex Bil our ex's were sisters also best friend share a Hi dollar post driver and a post hole digger, we each furnish a tractor. to which they are mounted except for haying season. It has worked well for us as we have several miles of common fence.

I think what was mentioned below, is plausible, one owns, the other rents, and of course, you can't for any reason, have what Ken describes below, that is a total deal breaker. I've observed this scenario, with a new JD round baler, 6620 combine, larger tractors, whereas my long time dairyman friend/farmer would rent out. Also his sileage body tandem Mack truck. I did see that baler come back with somewhat of a serious repair, but that could have happened on the owners watch, nothing malicious or negligent, might have been something up the pick up, but over the long run that has been a profitable piece from day one, I know because I was involved. I think it does amortize over time, these rentals were for the most part good, because most if not all was when it was idle, of course the weather can change things, opportunities, but when its not in use, and you have a rental opportunity, with someone who meets your standards, it was a good thing. These were not formal agreements, but the parties all knew each other for many years and they at times do work together, even when they may not see eye to eye, a piece of equipment is needed because theirs burned up or had a catastrophic failure. In this mans situation, sure he's been burned on a few deals aside from doing the rentals from things we have conversed about, who has not at one time or another and he's no slouch when it comes to numbers and money. The rentals definitely helped at the end of the year, like most of these guys, it adds a line item to all the other things they do in a years time, and its one that was in the black, you do have repairs and maintenance and can go the other direction, its the risk you agree to by virtue of what you do, so either stay safe, risk nothing, gain nothing or get involved very carefully. His truck made money, but you know how it goes, a tire, an expensive repair, goes into the red, most times not, so over time and volume it does carry the bad times.

Again, you cannot have people like Ken mentions, better if you or your trusted person can accompany said equipment or you observe, do the field maintenance to show your presence, or whatever it takes, if your partner does not care and is negligent, reckless and careless, that in itself would count me out.

There are some that will treat it as if it were their own, I'm one of those people with a demonstrated reputation for doing just that and more, thought its rare now to borrow anything, in years past I showed my appreciation by changing oil, a well done and complete lubrication job, cleaning and detailing a cab, washing, especially a dozer and the tracks, top off fuel, whatever it took, was always worth it and it builds trust in those who you deal with, including rental houses, I did the exact opposite to what most rental customers would do, the machine would leave my job and go to the next without having to go to the shop first unless it was due for major service work. That's the operative side of it, but very important, all these things can make money if done right, but can also go horribly wrong, all depends on how the people are who are involved. Likely preaching to the choir with the latter, but you know what I am getting at just the same.

I can see how something like you're doing could work- but on something like a baler, you would inevitably have a time when both have hay to bale and weather coming- and hard feelings no matter what you do.

Had a neighbor/ friend and we helped each other out if somebody was in a jam (haying), but we both had a complete set of equipment.

Had another neighbor who blew up his baler late in the season- I was about to bale my last field, they still had a couple to bale. Asked to use my baler, they'd bale mine up first (I was having to do it on evenings and weekend, so that was helpful), then they'd do theirs. Worked fine- they brought it back all cleaned up and greased, with a couple bales of twine.

But a couple of months later, I had need of a backhoe, so asked if I could use theirs. They said, "Sorry, we don't loan out our equipment."

After that, neither did I, as far as they were concerned.

(quoted from post at 11:57:44 12/12/13) I am working on next year's plan and trying to determine the best move to make on equipment. I am eyeing a piece of equipment that I think will make a good return in a short amount of time. The trouble is this investment looks a whole lot better spread on quite a few more acres which are near impossible to come by. I can think of people to cost share with but also see potential problems.

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Use to be a pretty common thing here. Now you just don't hear of it. To many people willing to sue over every little thing. It fell apart here with the farm bust of the 80's. Several guys, in together on equipment with them all having their name on the loan contract. One goes bust or dies unexpectedly.....you see the problem. The lenders are not going for it too much anymore because of the legal entanglements.

Another thing that was common years ago was like one guy buying a new baler the other a new swather or haybine.

I think today the best solution is to buy what you need then hire yourself out to run it. You have to keep in mind that it's going to wear out that much faster but it helps get it paid for.

My nephew and I are talking about getting a trailer together. But that's a "no one borrows it" kinda deal, not even his dad, my BIL. I know between him and I we can make it work. I'll just change my will that my half goes to him.

Rick

I loan some equipment, and borrow some equipment. If it is broke when it comes back, I just deal with it. PEOPLE ARE MORE IMPORTANT THAN THINGS!

Know a couple guys who go in together and rent a new combine every fall to harvest their crops. Both own trucks, not sure who owns the cart. They are not in any way related either.

Neighbor and I do a lot of that but we own complimentary pieces. I trust her as she keeps everything maintained as if it were new and takes exceptional care of machinery. I let her know when I am thinking of an equipment purchase and she does the same if it would impact each other. I bought a new mixer grinder. When I grind I do some for her. She supplies the corn as I don't have any. Just one example that works well.

There has to be lots of trust there. You would need to have someone that thinks like you and works like you. I just think there is less of that now. Rather than having a few hundred acres to support the family, a farm must be a big business now. Everyone is trying so hard to keep above water and that means renting and buying more ground. If a neighbor understands the way you think you may fear they will beat you out of something. Instead of being partners in the same vocation you are runners in the same race. Times have just changed.

I prefer to work and live with a mentality that my grandparents have. It is carpooling for country boys.

I used to have that outlook also , but when it comes to having something returned & no longer usable plus having a spouse that nags you for even lending it , that added to my decision for not lending . But I will say , there may be certain guys I will lend to .I"ve borrowed things in the past that were about shot . And then during the time of my using it , it died all together . So the owner gave me the altimatum even tho he knew it was ready to collaps . And that let me to borrow less & buy my own . Thats why I have so many tools I guess . But its a decision a guy will have to make himself . God bless , Ken

I'm in the mindset I would rather lend it than borrow it. If it comes back broken it's no different than having hired help running the stuff. I do have one neighbor that I will occasionally borrow something from but nothing of substance. My brother usually laughs and says what are we Rent-A-Center? I do co-own a fertilizer spreader and so far that's worked well but I take it when he's done with it.

I share the cost/ownership on a lot of the equipment with my sons and my brother. Here is how we do it.

We split all the bills on a percentage basis. This percentage is arrived at based on the total acres/hours the equipment is used by each owner/partner.

Example: On a combine. If I ran 500 acres, my one son ran 250 and my brother ran 250. I would have 50%, my son 25% and my brother 25%.(these are made up percentages as ours are split up among more partners)

So we go and buy the machine:

$20000 Cost. I would pay $10000, my son $2500 and my brother $2500.

Any payments are split the same way.

Annual repairs are split the same way.

This works easiest if you do not have to finance the items externally. The last several times that we have done this we all just chipped in our percentages and bought the item straight out.

It works on the back end too. We just sold a combine we had. We just split the proceeds just like we did all the costs.

We started buying machinery the neighbor didn"t have, like a tedder, and we borrow his culti-mulcher. Takes lots of trust though. Our other neighbor has been so good to us over the years, we ended up buying a 300 bushel gravity box, mainly for him to use. It"s still sitting in his shed, which is a good thing, my shed is full.

In my situation I am a little worried if commodities were to take a hard drop buying this unit could make things tight. Of course worst case scenario is if it is not working out then sell it before regrouping for an alternate solution. For right now I see a tangible return if I were to buy it. I always wished I could have a family dynamic such as yours for these kind of situations among others. I know of a farm family that handles things similar to yours with 4 operations co-oping so to speak.

Before my farmer friend got his Kinze 12 row w/ interplant, he had a no till drill for his beans. The neighbor used the drill, so he provided a FWA tractor to put it on, then they both used that set up as needed. I don't know all the details, but they seemed to think that worked for them!

I have been trying for 5 years to get a group to buy construction equipment for renting amoung ourselves. All members invest equal amounts and rental is a little less than equipment yards get.
My thinking is that members who use the most pay most over the life of equipment. Plan must be flawed,because each of us continue buying and renting on our own.

Good friend lost his farm over buying equipment at the wrong time. In 1979 he bought two new tractors, White 2-105 and a 2-155. Then the bottom fell out of the grain market just as interest rates took off. His payments where 25% more than when he started them and grain 50% of what it was when he took delivery.

I would be real careful right now on any buying of equipment. The market has been red hot. So values are at record highs. I think they will fall in the next 24 months and fall hard.

I know where you are coming from. I'm sorry, one little saying doesn't cover all situations. But 23 years ago a Tornado hit our place wiping out all the buildings and moving the house and knocking out all the windows and doors and ripping the roof almost off.That day our neighbors to the South took us in and loaned us a 2 yr old pickup to use till the insurance settled on ours. Then the next day over 70 people showed up to roof and board up the windows and put in new doors and ran temporary electric from a new pole the REA came and put in that day, don't know who put it all together. Also another neighbor 10 miles away brought his backhoe over and kinda forgot it for at least 6 months. There is a lot more! But you see I can never repay them all! So I try to pass it on. I hope I have. Vic

Oh wow , things must've been tragic at that time . I can understand totally your outlook . I used to bend over backwards to help & support others in need with the outlook of : now what & how would God handle these situations . But ever since 2000 with my beautiful wife of 33+ yrs leaving me for an adultress life , The damages she caused me inside & with my children plus all our so-called friends turning me out in the dark , I've struggled with TRUST . Thank God , He didn't turn His back on me . I've been slowly working thru my personal issues , but not there yet . Also my 2 older sisters have been supporting me , so that's helped some .God bless , Ken