From Kansas Agland:
ST. JOHN – For about two months of the year, Stafford County farmer Jordan Hickel would run his pricey combine through wheat fields in June, followed by fall commodities like corn and soybeans.
Then the machine would sit silent in the shed, awaiting the next harvest season.
That’s quite the down time for such an expensive machine, which got Hickel thinking: Last year, the 31-year-old purchased a 2010 Case combine for $160,000 – without the header. He began wondering if there was a way to garnish extra revenue from such a big investment.
In February, he listed his combine on a new sharing website for farm machinery. Within weeks, he had wheat farmers in Colorado and Washington state lined up to lease his combine after he completes his own harvest this June.
“I’ve wanted to do this since I got into farming,” said Hickel, a fourth-generation farmer. “I didn’t get the chance to take over the family farm – I bought my way into (farming). You have to utilize the full asset to make it work.”
Uber offers a ride-sharing service and AirBNB gives folks a website to list and find lodging. Now, that same sharing economy mindset has come to the farm.
With those sharing platforms in mind, Kansas City-based MachineryLink launched a machinery-sharing website in October.
“Over the past few years, we watched what was going on in sharing in other sectors of the economy and the dramatic impact it had,” said Ben Dye, MachineryLink’s vice president of sales. “We started looking at our customers.”
It hasn’t taken long for farmers to sign up – even quicker than Dye and others first envisioned. MachineryLink Sharing, as it is called, already has more than 1,300 growers signed up – those offering to share their equipment as well as those looking for a machine, Dye said.
The platform lists “tens of millions of dollars’ worth of equipment,” according to the company, which includes not only combines, but sprayers, tractors, drills and other ag machinery.
“It speaks to $244 billion in farm equipment sitting on farms today,” said Dye, adding it is ideal for “farmers like Jordan who look at their sheds and instead of being an expense it is a revenue opportunity.”
The sharing concept actually isn’t anything new for MachineryLink. The company started way before Uber − about 20 years ago when Kingman County farmer Dave Govert began sharing a combine with a corn farmer in Nebraska.
When his neighbors saw how well the arrangement worked, they asked if the Nebraska farmer had neighbors who might be interested in similar arrangements. Govert and his wife, Sheila, saw the need for networking among farmers and thought they could facilitate profitable relationships.
From there, the Cunningham couple founded MachineryLink with a couple of others. The idea was to create an opportunity for farmers to access newer farm equipment technology without having to tie up large amounts of capital.
In 2000, they had three combines. Within five years, they had a fleet of combines that they sent to farmers in 26 states.
MachineryLink still has combines. But through MachineryLink Sharing, farmers can rent equipment on demand from fellow farmers.
“Farmers have been sharing with each other a long time,” said Dye. “But with this platform, now they can share with farmers with different type of crops and different seasonality.”
Such a platform couldn’t have come at a better time, Hickel added.
The farm economy is tanking. Commodity prices are low due to good crops and bigger supply. Farm debt is projected to increase by more than 2 percent.
If realized, 2016 net farm income could be the lowest since 2002. According to the U.S. Department of Agriculture, income is projected to drop 56 percent from its recent high in 2013.
Farm equipment is a big investment. New combines can cost more than $400,000 or $500,000.
“Farmers are strapped with this tremendous debt load,” Dye said, adding that the “sharing economy model can help lighten that load.”
Although he’s a multigenerational farmer, Hickel’s journey into farming hasn’t been as easy as coming home to the family farm after college.
“Ever since I was able to walk I was on a tractor with my dad,” Hickel said.
But after a few rough years, his dad quit farming when Hickel was a teen. Still, Hickel couldn’t imagine another profession. He went to Fort Hays and got a business degree.
“I knew I wanted to get back to the farm,” he said. “I knew I needed a little bit more business saviness.”
This isn’t his grandfather’s farm, after all, he said, noting precision management, along with the dollars it takes these days with inputs, land and machines.
He found a farmer near St. John who took Hickel under his wing, eventually letting him buy the farm. Hickel and his wife, Katrina, have three children and have been farming on their own since 2011.
“He has been a huge inspiration in my life,” Hickel said of his mentor. “He didn’t sell out to another big guy; he gave a young guy a chance.”
The Hickels have been working ever since to make their operation pencil – taking to heart the past. That is why they jumped on board with MachineryLink Sharing. They wanted to put the few hundred thousand dollars left all in the machine shed for 10 months of the year to better use.
Hickel worked with a sales representative on listing his combine, which included figuring the price Hickel should charge. He listed it for $1,800 a day and will have it rented out to the two farmers for a total of 20 days.
He feels comfortable turning the keys over to a stranger with the way the system is set up. He had the opportunity to speak to the farmer in Colorado. Also, MachineryLink uses a rating system similar to other platforms. Both sides can rate each other on a scale of five stars.
Normal wear-and-tear items are the responsibility of the owner, Dye said, adding users agree to treat the machinery as their own. Insurable events, such as an accident, fall on the user.
MachineryLink Sharing provides the online marketplace. Users pay for the transportation, although the company – with its storied background in hauling equipment across the nation – will help, if needed, he said.
Meanwhile, for its part, MachineryLink takes 10 percent from the combine’s owner, along with 5 percent from the user, Dye said. And, with wheat harvest getting started in Texas soon, combines are already on the move.
The company also handles the payments and verifies the user has insurance.
Hickel said his sales rep called to tell him he had another offer – but Hickel didn’t think they could fit it in with his own harvesting timetable.
However, he might pick up another combine himself using MachineryLink Sharing if his acres expand.
“I am still kicking it around,” he said, adding he will be taking over some family land from his grandmother. “If I do pick up a few more acres, I do need a second machine to make sure I have everything done in a timely fashion.”