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Costs of machinery operation
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By John
Fulton
[NOV. 18, 2005]
As many know, Illinois doesn't publish custom
rates for farming operations. What we do publish is
cost-of-operation figures. These are the numbers that figure the
actual cost of running a piece of equipment through the field.
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There are some givens in the calculations. The last complete
set, published in April, used 85 percent of the purchase price
of a piece of equipment, an interest rate of 7 percent,
insurance and housing at 1 percent of remaining value, diesel
fuel at $1.50 (more on that later), lubrication cost of 10
percent of fuel, tractors operating for 300 hours per year,
depreciation of 10 years, labor at $13.50 per hour, and labor
time of 110 percent of tractor hours. Published costs of
operation in April were $31.10 per acre for combining corn,
$26.30 for combining soybeans, $10.70 for chisel plowing, $14
for a mulch tiller (disk, chisel), $8.20 for a tandem disk and
$7.40 for applying anhydrous ammonia. When factoring in a diesel
fuel cost of $2.50 per gallon, rates obviously increase. The new
corn harvest rate would be $34.85 per acre, $28.97 for
harvesting soybeans, $12.03 for chisel plowing, $15.64 for mulch
tilling, $8.93 for tandem disking and $8.01 for applying
anhydrous.
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Keep in mind that these rates are break-even figures after paying a
labor charge. Any allowance for profit should be added onto these
figures, with a recommended range of 5 percent to 15 percent. And,
of course, a producer's own costs are actual costs. The costs given
here are averages, largely based on manufacturers' data and
computer-generated numbers.
[John
Fulton, unit leader,
University of Illinois Extension,
Logan County Unit]
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