Farm Capital Expenditures Stabilizing?
It’s no great secret that modern farming requires significant amounts of capital. Capital expenditures made by farm businesses can be quite volatile, typically rising as incomes increase and falling as they decrease. This volatility creates lots of challenges for the businesses that supply capital goods to the sector as well as the farmers themselves. Faced with a stock of capital assets that depreciate over time, it is a significant challenge to decide when to make new investment decisions or even make replacement decisions. This is particularly true when debt is used to finance capital investment. Farmers and businesses, in general, are nervous to be caught paying for large capital investments should income fall. (more…)