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.

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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