Replacing equipment now could be better for beet growers

Sugar beet growers looking to re-equip for this year’s harvest might be able to secure a more favourable purchasing package than in recent seasons according to a leading rural finance specialist.

“With the annual investment allowance for farm machinery standing at £500,000, double what it was last year, there’s a strong case for re-equipping now,” said independent financial specialist, David Hughes.

“Deciding when to re-equip and when to squeeze a final year out of existing equipment is always a balancing act for growers. Taking an existing unit through another season will inevitably mean committing to higher servicing and maintenance costs than would be attached to a replacement unit, factors which need to be assessed against the investment and financing demands introduced when changing a machine. Operating reliability and performance should also be taken into account.”

Norwich-based Mr Hughes also commented that the £500,000 investment allowance, plus base rates at 0.5%, were solid ‘here and now’ factors in a financial marketplace which is already starting to react to potential rate changes next year.

“After six years of 0.5% base rates, the talk is all now about shifting back to 1.5% or even 1.75% by the end of 2015,” he said. “Irrespective of how accurate such forecasts prove, the money market is already adjusting in relation to longer term rates. If the on-farm figures add up now, therefore, an early look at what deals may be available this season could prove beneficial.

“Growers, of course, should always talk to their own accountant or financial adviser before making a final decision.”

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