Machinery Cost Estimates: Summary. Illinois Farm Management Handbook, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, updated October 11, 2021. If farmland is cash rented, subtracting the cash rent from the operator and land return gives the farmer return. endstream endobj 366 0 obj <>/Metadata 166 0 R/OCProperties<>/OCGs[393 0 R]>>/Outlines 250 0 R/Pages 358 0 R/StructTreeRoot 262 0 R/Type/Catalog>> endobj 367 0 obj <. )n6skjsic;9sizAlItFZ&\"i[Hz0^th |BJ!$0.Fc;z -`fLVacP;a A01|pZ AAs The 2022 corn price of $4.50 per bushel is $.77 per bushel higher than the 2014-2020 average of $3.73 per bushel. Non-land costs for 2022 corn and soybean production are projected to be at all-time highs. Dairy industry works to build trust with Gen Z, 13 ways to have better conversations about ag, Crop progress: Corn plantings pass the quarter mark, A bill that would kill large-scale livestock farms, Weekly grain movement: Corn exceeds expectations. Reasonably optimistic projections can be made for 2022 corn and soybean returns based on projected corn and soybean prices being above 2014-2020 average prices. The farmdoc daily website falls under University of Illinois copyright and intellectual property rights. Check out the Michigan Manure Hauler Certification Program! Between 2019 and 2021, the list price on a 310 HP tractor increased by 9.1% from $410,256 in 2019 to $447,479 in 2021. Allowances for profit are not included. The 4-H Name and Emblem have special protections from Congress, protected by code 18 USC 707. Illinois Custom Farm Rates 2020 Rentals Both prices are significantly above the 2014 to 2020 average price of $3.73 per bushel. Total non-land costs for corn are projected at $677 per acre, up by $70 per acre from the 2021 level of $607 per acre. List price and interest rate increases resulted in an increased in overhead costs from $110.90 in 2017 to $122.90 in 2019 (see Table 1). Per acre cost estimates are made based on assumptions concerning prices, interest rates, and use. FAST Tools. The diesel fuel price was increased from $2.50 per gallon in 2019 to $2.75 per gallon in 2021. Between 2017 and 2019, most per acre costs increased between 7 and 9 percent. The July 2021 version of the publication entitled Revenues and Costs for Illinois Grain Crops and the 2022 Illinois Crop Budgets provides more detail on these estimates. Custom Rates for Farm Services in Missouri | MU Extension PDF Machinery Cost Estimates: Harvesting - farmdoc 0 Schnitkey, G. Crop Budgets, Illinois, 2022. Illinois Farm Management Handbook. Table 2 shows estimated costs in 2017 and 2019 for several different tractors sizes, combining corn and soybeans, a field cultivator, and a conventional planter. The rates reported in the publication were the prevailing rates in the spring of 2020. An $18 per hour rate was used in 2017 compared to $19 per hour rate in 2019. Copyright 2023. Machinery Cost Estimates Summary - farmdoc IL Labor costs per hour increased from $20.90 per hour in 2019 to $22.00 per hour in 2021 (see Table 1). Non-land Costs: Costs are projected to rise considerably for the 2022 crop year. Overhead includes depreciation, interest, insurance and housing, and repairs. Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily. Due to the fuel price increase, fuel costs for the 310 horsepower tractor increased from $33.60 per hour in 2017 to $37.30 per hour in 2019 (see Table 1). Be aware that average custom rates reported may not cover all of an operator's costs. Research Analyst, Agricultural Business and Policy Extension, Raymond E. Massey A small number of responses combined with a large range of responses means that there is less confidence in those results. Urbana, Type 2 or more characters into the input search below for suggested results, use up and down arrow keys to navigate through suggest box. For soybeans, a return to the 2014-2020 average results in a -$18 per acre return, well below the $11 low set in 2000. Tab will move on to the next part of the site rather than go through menu items. For the best experience on our site, be sure to turn on Javascript in your browser. Estimated machinery costs often are used to set custom rates when one individual performs a field operation for another individual. Per acre costs did not necessarily go up as much depending on assumptions for field efficiency and acres covered. The $413 per acre projection would be $42 per acre higher than the 2021 projection of $371 per acre. From 2017 to 2019, most of the estimated machinery costs went up. The rates reported in this guide summarize a statewide survey conducted online and by solicitations of University of Missouri Extension specialists in the spring of 2023. Thank you to those who provided information even if it was just for one activity. Total costs for the 310 horsepower tractor were estimated at $181.10 per hour in 2019 (see Table 1) and per hour increased by 4% to $189.20 per hour in 2021 (see Table 1). When few responses are averaged, a single response can move the average a lot. There are three years shown in Table 1. At the 2014-2020 average price of $3.73 per bushel, farmer return would be -$145 per acre, well below any recent return. Machinery costs would have been higher had not interest rates been reduced from 2019 to 2021. of N are returned to the soil. The University of Minnesota provides total machine cost per acre, machine rates per hour and estimates of acres per hour fuel usage for many of the machines. The fact sheet includes custom rates averaged from all the surveys and maximum and minimum rates reported. Fertilizer prices for Illinois published by USDA (May 12 report) are: N $0.40, P $0.34, K $0.29. Illinois Farm Management Handbook, Department of Agricultural and Consumer Economics, University of Illinois at Urbana . 61801, Communications and Information Technology, Our Impact in Agriculture and Natural Resources, Our Impact in Community & Economic Development, Our Impact in Illinois Nutrition Education Programs, Our Impact in Integrated Health Disparities, Backyard Beef: A guide to small-scale feeding, 2023 University of Illinois Board of Trustees. am This information is for educational purposes only. University of Missouri Extension is an equal opportunity/access/affirmative action/pro-disabled and veteran employer. Costs for most operations are higher in 2019 than in 2017. For soybeans, a $13.60 per bushel price is used for 2021, and a $12.35 per bushel price is used for 2022. Authors: Dale Lattz and Gary Schnitkey. PDF 2020 Nebraska Farm Custom Rates - University of Nebraska-Lincoln To contact an expert in your area, visit https://extension.msu.edu/experts, or call 888-MSUE4MI (888-678-3464). These results have also been compared to previous custom rates surveys to see if the direction and magnitude of changes seems reasonable. PDF 2023 Iowa Farm Custom Rate Survey - Iowa State University This publication shows estimated costs for combining, using grain carts, and hauling grain. Learn more FAST (Farm Analysis Solution Tools) are a suite of Microsoft Excel spreadsheets designed to assist those in agriculture make better decisions via user-friendly computer programs. However, the remaining portion of the growing season may impact yields. For more information, visit https://extension.msu.edu. Fuel costs are based on $2.50 per gallon for diesel fuel. Factors impacting costs are illustrated for a 310 PTO horsepower tractor in Table 1, which shows per hour costs of operations from 2017, 2019, and 2021. Assuming a 1200lb round bale is 15% moisture, the nutrient value per bale is $12.91. %PDF-1.6 % Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, July 27, 2021. These values are taken from the July 2021 version of Revenues and Costs for Illinois Grain Crops, a publication available on farmdoc showing actual returns from 2015 to 2020 and projections for 2021 and 2022. Learn more Ruraltax.org contains many articles on taxes aimed at farm and land owners. The purchase price is assumed to equal 85% of the list price of the tractor. To have a digest of information delivered straight to your email inbox, visit https://extension.msu.edu/newsletters. A return to 2014-2020 average prices seems quite possible. It contains averages of several different university survey results on rates paid for farm custom machinery work. Farmdoc chart and PDF of historical Illinois land values from 1912 to the present. Diesel prices have increased by 38 percent in the last three years. Go to Custom Rates, location icon102 Filley Hall Lincoln, NE 68583. Costs for most operations are higher in 2021 than in 2019, with most of the increases due to increases in list prices of machines. The list price increase will also increase costs but is countered by a decline in interest rates from 5.5% in 2019 to 4.5% in 2021. for a look at their summary, including commentary by farm management experts Dale Lattz and Gary Schnitkey. ) Similarly, more acres of use will generally reduce per acre costs of a field implement. We comply with the Federal Trade Commission 1998 Childrens Online Privacy Protection Act (COPPA). PDF Ohio State University Extension Agriculture & Natural Resources Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily. Table 1 contains estimates of revenues and costs for corn and soybeans grown on high productivity farmland in central Illinois. However, the results presented here have been compared to custom rates guides in Iowa to see if our rates are in line with their rates. For me, that sequence is too often interrupted by cussing the weatherman, tedding, and more raking. Yields for 2021 have been raised slightly from trends, as the growing season appears favorable across much of Illinois. Custom rate guides are popular documents in those states that continue to do the survey legwork; unfortunately, many do not. Lattz, D. and G. Schnitkey. Custom Rates for Farm Services in Missouri. Cost Management: Harvest Operations - farmdoc daily per hour in 2019 (see Table 1). Use has a large impact on per hour costs. Labor time is assumed to be 1.1 times the tractor hour resulting in a 10% higher cost per tractor hour. Obviously, much can change between now and delivery in both years. College of Agricultural, Consumer, and Environmental Sciences, Department of Agricultural and Consumer Economics, College of Agricultural, Consumer, and Environmental Sciences. The number of responses to many questions asked was too low to have statistical confidence in the results. A return to average 2014-2020 prices will result in negative 2022 returns if yields are at or below trend. hb```a``z B@16,N-,L s2.\ rkT2;t(am`m``P]=in?\5NP9Z^!SVzElIT?U=)"]vjVh Machinery costs estimates are available in the Management section of farmdoc in five publications: Costs are estimated using an economic engineering approach that relies on formulas developed by the American Society of Agricultural Engineers (ASAE). MSU is an affirmative-action, equal-opportunity employer. Demand factors also will impact prices, with primary importance being demand from China. As farmers prepare to sharpen the pencil, I think it is important to look at what hay costs to produce. Part II of the custom rates survey included questions about fall operations such as harvesting, hauling grain and livestock, as well as miscellaneous custom work activities on the farm. Since 2000, when comparable returns have been compiled, the lowest return was -$50 per acre in 2015. On corn, for example, interest costs are projected to decline from $14 per acre to $12 per acre. Enter and space open menus and escape closes them as well. For 2020, revenues and costs are summarized from grain farms enrolled in Illinois Farm Business Farm Management (FBFM). The USDA reports that machinery values and labor costs have increased by about 23 percent and 18 percent, respectively, since our last custom rate survey in 2019. Guidelines are available here. Higher costs have led to a situation were higher prices and above trend yields are needed for profitability. Most of the increases are due to increases in list prices of machines. These estimates are useful for determining custom rates and for analyzing machinery costs on farms. FAST (Farm Analysis Solution Tools) are a suite of Microsoft Excel spreadsheets designed to assist those in agriculture make better decisions via user-friendly computer programs. Click here (http://www.farmdoc.uiuc.edu/manage/newsletters/fefo06_16/fefo06_16.html) for a look at their summary, including commentary by farm management experts Dale Lattz and Gary Schnitkey. Crop Insurance Summary of Business Tool (Sheet), Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Post Application Coverage Endorsement Tool, Biomass Crop Budget Tool Miscanthus and Switchgrass, Illinois Soil Productivity and Yield Utilities, Illinois Crop Budgets and Historic Returns, Department of Agricultural and Consumer Economics. The University of Minnesota provides total machine cost per acre, machine rates per hour and estimates of acres per hour fuel usage for many of the machines. As a result, a bale of hay sitting in the field costs $33.11. For a detailed statement, please see the University of Illinois Copyright Information and Policies here. These represent averages across a variety of farms with different situations. But it is still a very popular Extension guide. Every ton of hay contains approximately 40 lbs. Still, overhead costs increased from $122.90 per acre to $126.10 per acre. In this situation, the extremes may have unduly influenced the average reported. Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily. Custom Rates | Agricultural Economics - University of Nebraska-Lincoln The site also contains a completed example of a farm return. Pesticide and seed in 2022 are projected to increase by 8 percent over 2021 levels. Machinery cost estimates for 2019 have been released. These rates, except where noted, include the implement and tractor if required, all variable machinery costs such as fuel, oil, lube, twine, etc., and the labor for the operation. 406 0 obj <>stream Per hour costs are divided into overhead, fuel, and labor categories. This publication shows estimated costs of performing agricultural field operations. ltimas Notcias. Note that ad hoc government payments, including Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments, were important sources of revenue. Haul manure? Custom rates in a given area may vary significantly according to timeliness, operator skill, field size and shape, crop conditions, the performance characteristics of the machine being used, the relationship between the custom operator and the person needing custom work done, competitive pressures, and economic circumstances of the custom operator. for the complete table of custom rates, which also lists tractors of various sizes. The $24 per acre corn projection compares to an average farmer return of $4 per acre from 2014 to 2020. hbbd```b``IA$b"E``f0[~&E \"AX"0& A)DrtIn`o #PK? Rates change from year to year due to expense changes and the availability of custom operators. For a detailed statement, please see the University of Illinois Copyright Information and Policies here. Drew Kientzy Rates are available in the PDF file, available via the Download this publication button. The diesel fuel price was increased from $2.25 per gallon in 2017 to $2.50 per gallon in 2019. From time to time, Prairie Farmer gets requests for the custom rate estimates on various field operations. Projections are made for 2021 and 2022. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Lattz, D. and G. Schnitkey. Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Briomass Crop Budget Tool Miscanthus & Switchgrass, Illinois Soil Productivity & Yield Utilities, Farmland LEasing Facts Sheets & Pricing Information, https://farmdoc.illinois.edu/handbook/field-operations, https://farmdoc.illinois.edu/handbook/tractor-costs, https://farmdoc.illinois.edu/handbook/harvest-operations, https://farmdoc.illinois.edu/handbook/forage-operations, https://farmdoc.illinois.edu/handbook/machinery-cost-estimates-summary, Adverse Corn and Soybean Price Scenarios for 2020 and 2021, Department of Agricultural and Consumer Economics. Overhead costs also increased because interest rates were increased from 5.0% in 2017 to 5.5% in 2019. In calculating costs, for example, 300 hours of use were assumed for tractors. Left and right arrows move across top level links and expand / close menus in sub levels. The Number reporting and Range of responses columns are important. Overhead includes depreciation, interest, insurance and housing, and repairs. Copies of the new guide can also be obtained from the Extension Crawford County Office at 608-326-0223. Operator and Land Return: Operator and land returns represent a return to the farmer and the landowner. Substantial increases in list prices of machinery occurred between 2019 and 2021. This article was published by Michigan State University Extension. Fuel price and interest rate increases also contributed to higher prices. of K. However, it is important to calculate N losses at about 75%, thus only about 10 lbs. There may be fewer farmers using custom operators or fewer businesses conducting custom activities. Using current nutrient values, hay has a fertilizer value of $25.30 per dry ton. More detail on the approaches used to estimate overhead costs are given in the Machinery Cost Estimates: Tractors publication. Machinery Cost Estimates: Harvesting. Illinois Farm Management Handbook, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, updated October 11, 2021. Machinery Cost Estimates: Forage Field Operations. Illinois Farm Management Handbook, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, updated October 11, 2021. Higher returns in 2021 likely will lead to debt retirement, causing lower debt levels in 2022 with steady interest rates. We provide machinery cost estimates which may be helpful in setting custom rates. Further refined estimates for corn-after-corn, corn-after-soybeans, soybeans-after-corn, soybeans-after-soybeans, wheat, and double-crop soybeans are shown in the publication entitled 2022 Illinois Crop Budgets. The last time machinery costs were released on farmdoc was in 2017. Higher hours of use will lower per hour costs as depreciation and interest costs are spread over more hours. 2022 Crop Budgets Contain Higher Costs - farmdoc daily In determining the rates beyond 2020, custom operators and farm owners . Labor time is assumed to be 1.1 times the tractor hour resulting in a 10% higher cost per tractor hour. Total costs were estimated at $164.30 per hour in 2017 (see Table 1. Up and Down arrows will open main level menus and toggle through sub tier links. From time to time, Prairie Farmer gets requests for the custom rate estimates on various field operations. Like corn, both the 2021 and 2022 prices are well above the average price for 2014 through 2020 of $9.91 per bushel. Understanding the . By Mike Rankin. Combined with yields at or above trend in the U.S., those conditions would likely lead to lower corn and soybean prices in 2022. Labor costs per hour were increased from $19.80 per hour in 2017 to $20.90 per hour in 2019 (see Table 1). There is no assurance that the average rates reported in this guide will cover your costs for performing the service or that you will be able to hire a custom operator in your area for the rates shown. Calculate your own costs carefully before deciding the rate to charge or pay. Download the 2019 Custom Machine and Work Rate Estimates. Formulas are used to estimate each cost, and the purchase price enters those formulas. %%EOF For the best experience on our site, be sure to turn on Javascript in your browser. Machinery cost estimates for 2021 have been released and are available on the farmdoc website (see Management section of farmdoc). Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Briomass Crop Budget Tool Miscanthus & Switchgrass, Illinois Soil Productivity & Yield Utilities, Farmland LEasing Facts Sheets & Pricing Information, Schnitkey, G., K. Swanson, C. Zulauf and N. Paulson. Making hay is a consuming summer-time task. For corn, a $5.25 per bushel price is used for 2021 and a $4.50 per bushel price for 2022. From 2019 to 2021, most of the estimated machinery costs went up. The cost category with the largest increase is fertilizer, with an increase of $40 per acre for corn and $18 per acre for soybeans. The Median rate had an equal number of responses higher and lower. The farmdoc daily website falls under University of Illinois copyright and intellectual property rights. The 2020 Custom Rate Guide, release in April 2021 replaces the 2017 version.