By Glennis McClure
As the cost of machinery and equipment have continued to rise over the last several years, many individuals have offered custom services for field operations to spread their investment costs over more acres. Conversely, some producers are increasingly utilizing custom services to manage their capital investments. For some, this approach is driven by the inability to justify the cost of equipment due to limited acreage, while others may lack the time for certain operations because of off-farm jobs.
At the Center for Agricultural Profitability at the University of Nebraska-Lincoln, custom rate service providers are surveyed, and a custom rates report is published every other year. The report focuses on field operations and general service rates commonly required in agriculture. A second survey focused on livestock-related custom work was added in the year after the regular biennial survey. The Nebraska Livestock-Related Custom Rates Survey is available to complete now through Feb. 28, 2025. It is designed for custom service providers and those who pay for these services in Nebraska. For more information and to sign up to participate in the survey, visit: https://cap.unl.edu/nebraska-livestock-related-custom-rates-survey-sign/
Pages 5-9 from Part I of the 2024 report provide custom rate figures for spring field operations, including tillage, drilling, and planting. The report is one source custom operators may use to help determine what to charge or pay for agricultural custom services. In addition, machine operation costs are recommended to be calculated, and other factors should be considered, such as custom rates set by those providing various services.
In addition to tillage operations, no-till drilling of soybeans, small grains, and cover crops are custom rate figures included in the 2024 report, along with row crop planting operations that vary with or without coulters and band application during the planting process. A statewide average rate along with ranges and most common reported rates per operation are included in the report. Information is published for the various custom operations by the Nebraska Agricultural Statistics Districts as long as at least three responses are received for a particular area.
Table 1 provides a sample of a few of the spring field operation rates included in the 2024 Nebraska Custom Rates report. The state average for disk harrowing (secondary light seedbed preparation) is $18.54 per acre, with the most common rate reported being $16. A range of rates is reported across the state from $10 to $48 per acre. Two common row crop planting operation figures are shown as examples from the report. The first is a planting operation for row crops, including no-till (without coulters or row cleaning device and no band applicator). Notes the state average per acre rate is $23.94, with a range of $15 to $30. The most common per acre rate reported is $25 per acre. The second planting operation shown includes coulters with band applicators. The state average per acre rate is $23.73, with $20 as the most common reported rate and a range of $15 to $40 per acre reported statewide.
Table 1.
Custom rates for common planting operations in Nebraska have continued to increase based on survey data collected over the last several years as shown in Figure 1.
Figure 1
The Nebraska Custom Rates report is designed to assist operators and those using custom services. When sufficient data is available, it provides state average rates and figures for Nebraska's eight crop reporting districts. However, this report is just one resource. When setting rates, custom service providers should also account for their operational and ownership costs.
The Center for Agricultural Profitability (CAP) offers the Agriculture Budget Calculator (ABC) at agbudget.unl.edu to calculate operation and ownership costs per acre. The ABC program requires the following data to calculate field operation costs for power units (e.g., combines) and implements (e.g., headers):
- List prices of similar machines
- Purchase price
- Age at purchase
- Expected years of ownership
- Hours on power units and acres covered
- Coverage rate information
The program uses formulas from the American Society of Agricultural and Biological Engineers (ASABE) to estimate depreciation, repairs, and salvage value. Overhead costs such as taxes, housing, and insurance (THILM expenses) should also be factored into total costs. The ABC program is accessible online to anyone. For more details, visit cap.unl.edu/abc.
Table 2 presents the per-acre field operation costs for no-till planting of row crops, calculated using the Agricultural Budget Calculator (ABC) program. The example assumes a 230-horsepower tractor equipped with a no-till planter and estimates a cost of $31.96 per acre. This amount is $6.96 higher than the statewide average custom rate for no-till planting with a band applicator, as reported in the 2024 custom rates report.
Custom operators can use these figures as a guideline when setting their rates. Still, they should also consider factors such as their availability for custom hire services, local demand, and current planting conditions.
Table 2. Field Operation Costs/Acre
Planting - No Till Row Crops
(includes cash and ownership expenses)
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Machine costs shown in this report do not include taxes, housing, insurance or licensing costs.
'THILM' expenses may be entered in detail for you own enterprises as cash overhead costs and summarized in
Ownership and Overhead costs.
Source : unl.edu