Farm machinery costs have surged more than 25% in just three years, forcing U.S. growers to confront a new economic reality. According to updated data from Illinois Farm Business Farm Management and the University of Illinois, machinery-related costs rose from $136 per acre in 2021 to $171 per acre in 2024, driven by inflation, labor shortages, and continued supply chain disruptions.

Equipment price increases have outpaced nearly every other farm input, with USDA data showing a 21% spike in tractor prices between 2020 and 2023 alone. Depreciation, fuel, repairs, and machinery hire all contributed to rising costs, with depreciation climbing from $69 to $87 per acre, and repair costs jumping nearly 22% over the period.

The cost squeeze is especially acute when it comes to combines. Combines now represent the single largest machinery investment on most grain farms, and harvest-related expenses often account for more than half of a farm's total machinery costs. Analysis from farmdoc shows that per-acre combining costs for corn rose from $31.10 in 2021 to $40.90 in 2023 - a 31% increase. Meanwhile, the list price of a new combine soared from $587,000 to $741,000 over the same time frame, alongside higher interest rates and diesel prices.

The economics of scale have never been more critical. Farms that harvest fewer than 3,000 acres per combine are now facing significant cost disadvantages. In 2025, for example, combining corn across 2,600 acres cost $54.10 per acre, while spreading the machine across 3,600 acres brought that figure down to $43.40. These dynamics strongly suggest that sharing equipment - or outsourcing to custom operators who harvest at scale - could yield meaningful savings.

Collaborative machinery use is becoming more attractive. Two neighboring farms could jointly own a single combine and cover 4,000 acres together rather than operating two separate machines. Likewise, three 3,000-acre farms might combine operations and cut from three combines down to two, capturing scale efficiencies that help offset today's higher capital and operating costs. Even farms under the 3,000-acre threshold could benefit from custom harvesting if the operator has enough total acreage to optimize per-unit costs.

Beyond combines, other high-value machinery categories are under scrutiny. Farms that own multiple newer tractors, excess tillage implements, or dual planters may be over-invested relative to their operational scale. For instance, owning three tractors under 10 years old might now be a financial disadvantage compared to two - even if the total acreage is the same. The cost of owning two planters to plant soybeans and corn simultaneously has also grown, and farmers must weigh those costs against any yield gains from simultaneous planting.

Interest rates, inflation, and manufacturer production cutbacks are not likely to reverse in the near term. In fact, analysts believe this higher-cost environment is the "new normal," meaning producers must adopt a long-term view on machinery management. Delaying unnecessary replacements, partnering with neighboring operations, and leveraging precision agriculture to optimize machine usage are all tactics that can help protect margins.

The bottom line is clear: in this environment, cost discipline and operational efficiency are more important than ever. Farmers and ag managers who continue to use outdated machinery strategies risk being outpaced by those adapting to the new economics of equipment ownership. Rethinking what, when, and how machinery is acquired and used is no longer optional - it's essential for farm profitability and competitiveness in 2025 and beyond.