Abstract
Purchasing and maintaining tractors along with other machines are two of the most considerable costs for the agricultural sector, which includes farm equipment manufacturers, farm contractors, and farmers. Repair and maintenance costs (R&M costs) typically account for 10% to 15% of the total costs related to agricultural equipment and tend to increase with equipment age. Hence, an important decision in farm management is the optimal time for equipment replacement. Classical R&M cost estimation models, calculated as a function of accumulated working hours, have been primarily developed for U. S. operating conditions. However, R&M costs are strongly influenced by farming practices, operating conditions, crop and soil type, and climatic conditions, which can be specific for individual countries. In this study, R&M cost model parameters were recalculated for the current Italian situation. A complete dataset related to the R&M costs of 100 4WD tractors in northern Italy, including 43 tractors owned by farmers and 57 tractors owned by contractors, was collected. Based on these data, the classical R&M cost estimation model was refined with the purpose of assisting manufacturers in commercial assessment of the domestic market and supporting Italian farmers in their decisions about purchasing new tractors. The main model result indicated that the R&M cost incidence on the price of Italian tractors at 12,000 working hours (the estimated life of local tractors) was 48.6%, compared to a value of 43.2% obtained with the original model formulated for U. S. operating conditions. Further, R&M costs were higher for tractors owned by farmers compared to tractors owned by contractors, at 55.4% of the list price at 12,000 working hours compared to 45.7%.