Estimating the Effect of Fuel Price Increases on Your Operation

Estimating the Effect of Fuel Price Increases on Your Operation

April 4, 2008 

Q. What effect has the rise in diesel price over the last five years had on production costs?

A. To determine this, first you need to estimate fuel consumption. If you routinely track fuel use for farming operations for your tractors and combines, you probably already have the information you need. Simply multiply your historical fuel use per acre by the prices per gallon shown in the tables below.

Most folks, however, don't track fuel consumption by field operation and need a research-based estimate to compute the effect of a price increase on overall production costs. A good reference for fuel use estimates is the Minnesota Farm Machinery Economic Cost Estimates for 2008.

Table 1 presents the estimated fuel use per hour for power units, based on estimates in the Minnesota publication. Table 2 presents estimates of fuel consumption per acre for field operations.

Note: The fuel use per acre for field operations is independent of implement width. For example, consider two disks, one with a 20-foot width and the other with a 30-foot width. It would take 50% more power to pull the 30-foot disk (assuming the same travel speed, depth, etc.), but since the disk would be tilling 50% more acres per hour, the fuel use per acre would be the same for either scenario.

On-line Tools

Fuel consumption information in Tables 1 and 2 is taken from Minnesota Farm Machinery Economic Cost Estimates for 2008, by William Lazarus, Extension Economist, University of Minnesota. This publication is available online at http://www.apec.umn.edu/faculty/wlazarus/documents/mf2008.pdf (PDF 60.2 KB)

I have written an Excel worksheet based on the Minnesota fuel use estimates which shows the increases per hour for power units and the increases per acre for selected field operations each year since 2003. This worksheet is available at http://lancaster.unl.edu/ag/farm-mgt/FuelCostEstimator.xls

Tom Dorn
UNL Extension Educator, Lancaster County

Table 1. Diesel fuel cost per hour for various power units

 

 

 

Estimated

Spring '03

Spring '04

Spring '05

Spring '06

Spring '07

Spring '08

 

 

 

Fuel use

Cost/hr

Cost/hr

Cost/hr

Cost/hr

Cost/hr

Cost/hr

 

 

 

Diesel prices are for farm-delivered, off-road fuel

Tractors

 

 

Gal/hour

$0.90

$1.30

$1.65

$2.25

$2.30

$3.20

 

40 HP

2WD

1.8

$1.62

$2.34

$2.97

$4.05

$4.14

$5.76

 

60 HP

2WD

2.6

$2.34

$3.38

$4.29

$5.85

$5.98

$8.32

 

75 HP

2WD

3.3

$2.97

$4.29

$5.45

$7.43

$7.59

$10.56

 

105 HP

2WD

4.6

$4.14

$5.98

$7.59

$10.35

$10.58

$14.72

 

130 HP

MFWD

5.7

$5.13

$7.41

$9.41

$12.83

$13.11

$18.24

 

160 HP

MFWD

7.0

$6.30

$9.10

$11.55

$15.75

$16.10

$22.40

 

200 HP

MFWD

8.8

$7.92

$11.44

$14.52

$19.80

$20.24

$28.16

 

225 HP

MFWD

9.9

$8.91

$12.87

$16.34

$22.28

$22.77

$31.68

 

260 HP

4WD

11.4

$10.26

$14.82

$18.81

$25.65

$26.22

$36.48

 

310 HP

4WD

13.6

$12.24

$17.68

$22.44

$30.60

$31.28

$43.52

 

360 HP

4WD

15.8

$14.22

$20.54

$26.07

$35.55

$36.34

$50.56

 

425 HP

4WD

18.7

$16.83

$24.31

$30.86

$42.08

$43.01

$59.84

Combines

 

190 HP

 

8.4

$7.56

$10.92

$13.86

$18.90

$19.32

$26.88

 

220 HP

 

9.7

$8.73

$12.61

$16.01

$21.83

$22.31

$31.04

 

275 HP

 

12.1

$10.89

$15.73

$19.97

$27.23

$27.83

$38.72

Table 2. Diesel fuel cost per acre for field operations

 

 

 

Spring '03

Spring '04

Spring '05

Spring '06

Spring '07

Spring '08

 

 

 

Cost/hr

Cost/hr

Cost/hr

Cost/hr

Cost/acre

Cost/acre

 

 

 

Diesel prices are for farm-delivered, off road fuel

Tillage

Est. Diesel, gal/acre

$0.90

$1.30

$1.65

$2.25

$2.30

$3.20

 

 

 

 

 

 

 

 

Field Cultivator

0.33

$0.30

$0.43

$0.54

$0.74

$0.76

$1.06

Tandom Disk

0.47

$0.42

$0.61

$0.78

$1.06

$1.08

$1.50

Tandom Disk (HD)

0.76

$0.68

$0.99

$1.25

$1.71

$1.75

$2.43

Planting Equipment

Row Crop Planter

0.34

$0.31

$0.44

$0.56

$0.77

$0.78

$1.09

Minimum Till Planter

0.53

$0.48

$0.69

$0.87

$1.19

$1.22

$1.70

Grain Drill

0.49

$0.44

$0.64

$0.81

$1.10

$1.13

$1.57

Presswheel Drill

0.63

$0.57

$0.82

$1.04

$1.42

$1.45

$2.02

No-Till Drill

0.81

$0.73

$1.05

$1.34

$1.82

$1.86

$2.59

Crop Maintenance Equipment

Cultivator

0.46

$0.41

$0.60

$0.76

$1.04

$1.06

$1.47

Rotary Hoe

0.18

$0.16

$0.23

$0.30

$0.41

$0.41

$0.58

Boom Sprayer

0.11

$0.10

$0.14

$0.18

$0.25

$0.25

$0.35

Anhydrous Applicator

0.55

$0.50

$0.72

$0.91

$1.24

$1.27

$1.76

Stalk Shreader

0.74

$0.67

$0.96

$1.22

$1.67

$1.70

$2.37

Harvesting Equipment

Mower Conditioner

0.40

$0.36

$0.52

$0.66

$0.90

$0.92

$1.28

Hay Swather

0.35

$0.32

$0.46

$0.58

$0.79

$0.81

$1.12

Hay Baler PTO (twine)

0.40

$0.36

$0.52

$0.66

$0.90

$0.92

$1.28

Round Baler (1500 lb)

0.77

$0.69

$1.00

$1.27

$1.73

$1.77

$2.46

Combine (various heads)

2.00

$1.80

$2.60

$3.30

$4.50

$4.60

$6.40