For Matthew Avison of Arborg, necessity started him off in the equipment rental business. As he explains it, he needed a particular tillage implement on his farm and his only option at the time was to buy one. There was no equipment rental company in the area that could provide him with what he wanted.
In 2013 Avison, who immigrated from the United Kingdom to farm, founded Interlake Rentals in Arborg. He says the business concept has caught on well, and he has had a lot of support from local farmers.
“The basic saving on a farm comes down to the only control you have, which is over input costs,” he says. “We might be able to do a bit of marketing on our grain or beef, but the only true saving we have is on our input costs.”
By renting implements that see only occasional use on a farm instead of buying them, Avison believes producers can bring down overall costs by reducing their machinery investment. And the rental option can benefit both large- and small-scale producers.
“That (high investment cost) was where the shortfalls were that I saw as a farmer when I wanted to break up 300 acres of hay land,” he explains. “For a small cattle farmer looking to break up hay land, it makes way more sense to rent a set of discs to do that. Even for a big grain farmer, it doesn’t make sense to go out and buy a big disc to break up 200 acres. For rental, I have both established and startup operations (as customers).”
Avison focuses primarily on renting tillage implements. And today’s modern and sophisticated models come with a pretty high price tag.
“It doesn’t pay for the little guys to go out and buy a machine that’s that expensive,” he says. “And for the big guys who want to try stuff, they get a demo at the same time. There are quite a few aspects, and they apply to both large and small guys.”
Avison also thinks renting is an ideal solution for young farmers just starting out, allowing them to invest in land or cattle rather than in equipment, especially at a time when they don’t have access to much capital.
“The machinery problem, that’s a big one,” he says. “If he (a young farmer) wants to buy another 300 acres to stay at home (and farm full time), he is better off financing that than he will be financing a new cultivator, new harrows or anything else he can rent.”
And when farmers patronize a local rental firm, Avison says that helps the business compete even better on per-acre rental prices. “The more farmers can support a rental business, obviously mine included, the more products we can have to offer,” he says. “A cynical person might look at that and say we’re just making you more money. But the idea is that it is passed on. The more you use a rental, the more inventory I can carry. The more you use it, the more I can drop the rates on it saving you on costs per acre. My profitability is directly passed on to a farmer.”
“Farms seem to be getting bigger and bigger,” Avison says. “And the one thing we’re running out of is skilled personnel to run them and run the machinery.”