Agricultural Equipment Appraisals Are Much Needed In Today's Economy

Agricultural, in a global economy, is very much a business and as such should be treated as one. Whether you are purchasing or selling, a reliable appraisal of the agricultural equipment and machinery is essential.  Many banks, lending institutions, and insurance companies require an appraisal by a professional, certified appraiser.  Additionally, agricultural equipment appraisals can be useful or often required for:

  • property tax appeals
  •  estate settlements
  • litigation/ disputes
  • mergers
  • gifting and donations
  • accounting
  • financing collateral
  • divorce and/or partnership dissolutions
  • marriages/ pre-nuptial agreements
  • and more

The fair market value of the equipment or machinery is the goal. The fair market value of the equipment is typically estimated for an asset that is going to be in continued use. However, keep in mind that equipment is not all that an agricultural appraiser can be looking at.  Farms and livestock operations, timber properties, crops, vineyards, orchards, and even buildings on the property can also be appraised.

 Two types of appraisals can be done; an on-site investigation or a desk-top value.  Most institutions require the on-site appraisal, but sometimes, depending on the value of the equipment, a desk-top estimate is acceptable.  An on-site appraisal consists of a certified agricultural/farm appraiser going to the location of the equipment to have first-hand knowledge in gathering all the details needed. 

Typically, photos are taken, options are discussed, pieces are checked out, and a value can be determined based on fair market value.  Depending on who is hiring the appraiser and the reason, this is not always an option. The second type is the desk-top appraisal, which is simply information on the equipment that is based on current value and market trends.

One needs to take into consideration that the trends in agricultural and market values can vary greatly in just a few years.  Although a set time is not required, an up to date appraisal should be done periodically. Some agencies are requiring appraisals at set intervals to keep the operation at current values. Also, there are varying levels within the market value depending on the intended use of the appraisal. Forced liquidation values, wholesale values, or resale values are among the specific needs for appraisals and can vary greatly. A certified farm appraiser should be up to date on all current market trends and even future forecasts to ensure that the appraisal will meet the need.

July 4, 2016 12:00 am

Leave a Reply

Your email address will not be published. Required fields are marked *