Many Iowa farmers hire some custom work done in their farm business, or perform custom work for other people. Other farmers rent machinery or perform other services. Each year Iowa State University Extension surveys farmers, custom operators and farm managers to find out what the typical custom rate charges are for different machinery operations and other custom work in Iowa.
Results of the 2012 survey were recently compiled. The information below is based on survey responses from 276 Iowa farmers, custom operators and farm managers. For each operation, the average rate and the range reported are shown. In this survey, 28% of the respondents perform custom work, 11% hire work done and 61% indicated they do both.
The values reported in the survey publication are the rates expected to be charged or paid this year and they include tractor, implement, fuel and labor, explains William Edwards. He is the ISU Extension economist who oversees the compiling of the survey results and the interpretation. ISU Extension specialist Ann Johanns and student assistant Andy Chamra also help with the survey.
The average price for diesel fuel was assumed to be $3.25 per gallon for the custom rate survey values that are reported in this 2012 publication, says Edwards. A fuel price increase of $0.50 per gallon will cause total machinery costs to increase by approximately 5%.
Use these survey custom rate values only as a guide; actual rates can vary in a given area, and from area to area in the state
This custom rate schedule is intended only as a guide, says Edwards. Actual custom rates may vary according to availability of machinery in a given area, timeliness, operator skill, field size and shape, crop conditions, and the performance characteristics of the machine being used.
Rental rates for some machinery items are shown on the second page of the report, along with a worksheet for estimating rental rates for other items. "Note that all rates include fuel, labor and all other machinery costs for the tractor and implement," he adds. The 2012 Iowa Farm Custom Rate Survey publication is presented in the accompanying "pdf" file that you can access by clicking here. Or go to www.extension.iastate.edu/agdm which is ISU's Ag Decision Maker website. Look under "Crops and machinery" and click on "Iowa Farm Custom Rate Survey, file A3-10."
Also has a section on how to estimate a rental rate, how to do the calculations
The publication also has a section that shows you how to estimate a machinery rental rate, how to do the calculations. For example, say you want to rent a tandem disk. You start with the custom charge (includes labor, fuel and tractor) which is $12.55 per acre on the average, according to the 2012 survey.
The percent of the custom charge which is for interest, insurance, depreciation and repairs (excluding fuel and labor) is 70% for tillage operations, such as disking. You would use 70% for tillage machines, 80% for planting and harvesting. Multiplying 70% x $12.55 equals $8.79 per acre. That's the rental value of the disk, including the tractor.
To calculate the rental value without the tractor, you take the horsepower times the dollar per horsepower hour rental rate (.25 is the average this year) divided by the number of acres covered per hour. For example, 150 HP x 25 cents (per horsepower hour rental rate) divided by 15 acres disked per hour = $2.50. So the rental value of the implement is $8.79 minus $2.50 = $6.29 per acre.