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Custom Rates for Farm Machinery in 2000
http://edis.ifas.ufl.edu/ ( Publisher's URL )
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Permanent Link: http://ufdc.ufl.edu/IR00001901/00001
 Material Information
Title: Custom Rates for Farm Machinery in 2000
Physical Description: Fact Sheet
Creator: Hewitt, Timothy D.
Publisher: University of Florida Cooperative Extension Service, Institute of Food and Agriculture Sciences, EDIS
Place of Publication: Gainesville, Fla.
Publication Date: 2000
 Notes
Acquisition: Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Melanie Mercer.
Publication Status: Published
General Note: "Published May 2000."
General Note: "FE 268"
 Record Information
Source Institution: University of Florida Institutional Repository
Holding Location: University of Florida
Rights Management: All rights reserved by the submitter.
System ID: IR00001901:00001

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PAGE 1

Custom Rates for Farm Machinery in 20001 Timothy D. Hewitt2 1. This is EDIS document FE 268, a publication of the Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Science, University of Florida, North Florida Research and Education Center, Marianna, FL. Published May 2000. Please visit the EDIS website at http://edis.ifas.ufl.edu 2. Timothy D. Hewitt, extension economist, Department of Food and Resource Economics, University of Florida, North Florida Research and Education Center, Marianna, FL. The Institute of Food and Agricultural Sciences is an equal opportunity/affirmative action employer authorized to provide research, educational information and other services only to individuals and institutions that function without regard to race, color, sex, age, handicap, or national origin. For information on obtaining other extension publications, contact your county Cooperative Extension Service office. Florida Cooperative Extension Service/Institute of Food and Agricultural Sciences/University of Florida/Christine Taylor Waddill, Dean. Introduction Florida agricultural producers continue to be financially strained due to low prices for farm products, higher capital costs, and increases in energy costs. Machinery costs make up a substantial portion of the total cost of a farm operation. Effective management of machinery is an important element of cost control in any farm management program. Consideration should be given to all options before committing resources to perform a given unit operation. Options would include purchasing new equipment, purchasing used equipment, upgrading existing equipment, renting or leasing, exchange work, joint ownership, and custom hiring. Each machinery service decision will be dictated by the farm's resource needs and capability. Selection of the proper blend of machinery services will help ensure the total farm operation has the necessary machinery and capital resources available to manage the farm effectively. Custom Hiring Custom hiring is an important tool in controlling costs and managing cash flow. Custom hiring rather than owning may be more desirable. Advantages to custom hiring include: Lower equipment and ownership costs. Flexibility in directing capital resources. Smaller acreages. More flexibility to adjust crop mix to meet market demands. Ability to utilize a custom operator's specialized skills and experience. Contracting for the use of multiple machines. Elimination of obsolescence risk. Producer benefits from utilizing more modern, more efficient equipment. Allowing farm manager time to perform other work. Disadvantages to custom hiring include: Excessive rates at certain times.

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Custom Rates for Farm Machinery in 2000 2 Inavailability of machines when needed. Custom operator's reliability Work quality. Contamination (weeds and diseases) from other farms. Higher total costs. Each farm situation is unique, and each farm operator must decide the best blend of owned and hired machines. Custom Rates The custom rates used were obtained from county extension personnel and custom operators in North Florida, which is as all areas north and west of the Ocala. Questionnaires were sent to extension personnel and custom operators in this region. Table 1 summarizes machine operations into ranges of rates and most common rate in each region of rates. These data may be used as a guideline for determining the custom rates used in an area. The fairness of the rates was not considered in this compilation. These rates are often set by prevailing local rates that have no cost basis, partial exchange for other work with relatives and neighbors, and operators who have completed work on their own farm. Also, these rates are often set to cover variable costs with only some partial payment to machinery overhead. When deciding on ownership or custom hire, the farm operator should have a clear understanding of the impact on the business. Financial factors such as cost and cash flow are important factors, as well as equipment availability, operator reliability, and quality of work. Proper use of all the equipment options available should enable the farm operator to minimize financial strain, preserve capital, and allow time to perform work that is essential to operating the business.

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Custom Rates for Farm Machinery in 2000 3 Table 1. Custom rates for North Florida, 2000. Operation Unit Range of Rates Most Common Rate ($) ($) Land Preparation, Planting and Tillage Bottom plowing acre 8-20 15.00 Chisel plowing acre 7-18 12.00 Disking acre 7-20 12.00 Subsoiling acre 12-22 15.00 Ripper-bedder acre 10-20 15.00 Mowing stalks acre 5-12 8.00 No-till planting acre 15-25 18.00 Planting row crops acre 7-15 12.00 Drill, small grains acre 5-15 12.00 Sweep Cultivating acre 5-10 8.00 Rotary hoe acre 5-12 7.00 Drag harrow acre 5-10 7.00 Sprig bermuda acre 60-120 85.00 Bulk fertilizer spreading (dry) acre 15-25 20.00 Fertilizer spreading (liquid) acre 20-40 30.00 Lime spreading acre 5-15 6.00 Hand hoeing hour 6-10 7.00 Chemical Applications Ground application (tractor & sprayer) acre 4-12 6.00 Ground application (high clearance) acre 5-15 8.00 Ground application (cut in) acre 7-20 12.00 Ground application (spray coupe) acre 5-15 10.00 Aerial application acre 4-8 6.00 Low water acre 4-8 4.50 High water acre 4-8 5.00 Harvesting Combine, corn acre 20-35 25.00 Combine, irrigated corn acre 25-45 30.00 Comine, soybeans acre 20-35 25.00 Combine, small grains acre 20-35 25.00 Pick cotton acre 60-100 70.00 Dig peanuts acre 15-35 20.00 Combine, peanuts acre 20-50 40.00 Dig and combine peanuts acre 35-75 60.00 Mow hay acre 8-18 12.00 Rake hay acre 4-10 8.00 Mow and rake hay acre 10-25 15.00 Bale hay, rectangular bale bale .50-1.25 1.00 Bale hay, round bale bale 8-18 10.00 Mow, rake and bale (rectangular) bale 0.75-1.75 1.50 Mow, rake and bale (round) bale 10-25 18.00 Chop silages ton 5-15 7.00 Chop and haul silage ton 7-15 9.00 Bagging silage (150 ton bag) ton 10-25 15.00

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Custom Rates for Farm Machinery in 2000 4 Table 1. Custom rates for North Florida, 2000. Operation Unit Range of Rates Most Common Rate ($) ($) Miscellaneous Aerial seeding acre 6-12 7.50 Mowing (bush hogging) acre 7-15 9.00 Bulldozing hour 40-100 60.00 Dragline hour 50-125 75.00 Land leveling and terracing hour 40-100 70.00 Hauling, hay (rectangular) bale 0.35-60 .40 Hauling, grain bushel0.10-0.20 .15 Hauling, silage mile 0.25-0.50 .30 Grain, drying ton 0.25-0.35 30.00 Grain, drying bushel0.15-0.30 25.00 Chainsawing hour 10-20 15.00 Post hold digging (mechanical) hole 1.00-1.75 1.25 Building fence (5-strand barbed wire) linear foot0.90-1.25 1.10 Planting pines: Bedding acre 35-50 40.00 Chopping acre 20-65 45.00 Harrowing acre 40-65 45.00 Chemical site preparation acre 30-60 40.00 Mechanical planting acre 35-65 45.00 Hand planting acre 40-70 50.00 Orchard: Spraying tree 3-8 5.00 Pecan tree shaking tree 3-8 3.50 Pecan raking acre 15-35 20.00 Pecan harvesting pound0.12-0.20 0.15