February 26, 2013

Estimating Fuel Costs for Farm Equipment

With skyrocketing fuel prices, now's a good time to see how your fuel budget for farming operations has been increasing over time and get a grasp on expected fuel costs for 2013.

For example, from 2005 to 2012 the average cost of #2 diesel increased from $1.89 to $3.43 per gallon, an increase of 77%. Given that a 310 HP tractor uses approximately 13.6 gallons of fuel per hour, the fuel cost for that hour of use increased from $25.65 in 2005 to $46.65 in 2012.

You can view the fuel cost changes over time and estimate your own costs for 2013 and 2014 using the an Excel® worksheet I developed. You can either open the worksheet online or save it to your computer.

This worksheet is protected so you cannot change the worksheet except for the unprotected cells (in blue). You can add the average price per gallon of fuel that you'd like to use for 2013 and 2014. You may want to use actual historical prices or you can discover what the fuel cost would be given your own price scenario.

Table 1 estimates the gallons of #2 diesel fuel consumed per hour for various power units multiplied by the average yearly #2 diesel fuel price per gallon for the 2005 to 2012. It includes 12 horsepower options for tractors and three options for combines.

Table 2 estimates the diesel fuel cost per acre for various field operations based on the anticipated fuel consumption multiplied by the average yearly #2 diesel fuel price per gallon for the 2005 to 2012. It includes 18 budget lines  for tillage, planting, miscellaneous equipment, and harvesting.

For updates to this worksheet and related farm management information also check the Lancaster County Acreage, Farm and Ranch websute. Look under Hot Topics for the blue arrow and link to the Farm Management page. The Fuel Cost Estimator is linked under Custom Rates & Operating Costs.

Acknowledgements

Fuel use estimates taken from Machinery Cost Estimates prepared by William F. Lazarus, University of Minnesota

Prices for non-tax #2 diesel fuel are taken from Futures -Based Price Forecasts for Non-taxable Diesel Fuel written by Kevin Dhuyvetter of Kansas State University.

Tom Dorn
Extension Educator, Lancaster County