UNL Survey Results Indicate Rising Cost of Custom Machinery Operations

UNL Survey Results Indicate Rising Cost of Custom Machinery Operations July 12, 2018

Results from the University of Nebraska–Lincoln’s 2018 Custom Rates Survey indicate rising costs for machine hire operations and related services since the survey was last conducted two years ago. The survey of custom operators summarizes the current rates charged for specific machinery operations commonly used by agricultural producers.

Survey participants reported a state average labor rate of $18.85, which is 6% higher than in 2016. With diesel costs on the rise in 2018, $2.46 per gallon was the average farm delivered diesel price for the state, up from the 2016 rate of $1.68 per gallon.

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For more information on custom rates, survey lead author Glennis McClure will be hosting a webinar on July 24 at 12:30 p.m. CT. The webinar is free and can be accessed at go.unl.edu/custom-rates.

Similar to two years ago, 2018 survey participants reported noticeable increases with some custom machine hire rates, while there were only minor changes in some rates. For example, planting row crops with row cleaners went from $18.91 per acre in 2016 to $21.12 per acre in 2018, while drilling soybeans with a no-till drill went up just slightly from $17.76 per acre to $18.02 per acre. Harvest rates for fall crops generally stayed in the same range as the prior survey; however, combining irrigated corn using a flat rate per acre is at a state average of $38.22 in 2018, which is $1.00 to $3.00 per acre higher than previously reported.

“It is important for custom operators to take into account machinery, fuel and labor costs as rates are determined. Necessary expenses vary across the state as local demand and availability of labor may affect costs,” noted Glennis McClure, farm and ranch management analyst and extension educator. “While the Custom Rates Survey report may serve as a guide, farmers and ranchers are reminded to use their own judgment and consider their costs when negotiating custom operation rates.”

Findings from the survey are divided into two major sections. Part one includes spring and summer operations such as tillage, planting and harvesting of small grains. Part two includes information about fall and miscellaneous operations. Custom rate summaries in these sections include regional rates for the eight Nebraska Agricultural Statistics Districts and the overall state.

A total of 151 custom rates on machinery operations and related services were reported as part of the 2018 survey with 227 survey participants providing information on the various rates. Custom rates reported include charges for the use of necessary equipment, fuel, labor and supplies, such as baling wire or twine, provided by the custom operator. Seed, fertilizer and chemical costs are not included.

For those interested in learning more about custom rates, McClure will be hosting a webinar on July 24 at 12:30 p.m. CT. The webinar is free to view and can be accessed at go.unl.edu/custom-rates

The full 2018 Custom Rates Survey report is published as Nebraska Extension Circular (EC) 823.