How much should you charge if you are doing custom work for other farmers? Such as planting, spraying, harvesting, digging post holes or whatever? On the flip side, how much should you pay if you are hiring someone to do the work? What is a fair rate? The annual Iowa Farm Custom Rate Survey conducted by Iowa State University Extension can help provide guidelines to assist you in determining those charges.
The 2014 Iowa Farm Custom Rate Survey results are now available. They followed the recent trend of small, but consistent increases in rates each year. According to William Edwards, retired Iowa State University Extension and Outreach economist, most farm operations showed increases of 4% to 6% over the average rates in the 2013 survey. The survey includes information on tillage, planting, spraying and harvesting grain or forages. Also included are values for miscellaneous services and machinery rental.
The survey results are available in a publication you can pick up at your county Extension office, or obtain from the Extension Online Store or read on the ISU Ag Decision Maker website.
The values reported on the survey are the average of all the responses received for each category, says Edwards. The range of the highest and lowest responses received is also reported. The values survey respondents report are what they expect to pay or charge in the coming year. These values are intended only as a guide to help both custom operators and people who hire custom work done arrive at a reasonable rate.
A total of 195 Iowa farmers, custom operators and farm managers replied to the survey. And 27% of them reported that they performed custom work for others, 12% reported hiring custom work done and 61% indicated they did both.
Remember, these custom charges reported are average rates
There are many reasons why the rate charged in a particular situation should be above or below the average, he says. These include the timeliness with which operations are performed, quality and special features of the machine, operator skill, size and shape of fields, number of acres contracted, and the condition of the crop for harvesting. The availability of custom operators in a given area also will affect rates.
The ISU Ag Decision Maker website offers a Decision Tool you can use online. It is available to help custom operators and other farmers estimate their own costs for specific machinery operations. The Machinery Cost Calculator, File A3-29 can be found under Crops, then go to Machinery in the Ag Decision Maker table of contents.
The 2014 Iowa Farm Custom Rate Survey is available at your county extension office or online as publication FM-1698, from the Extension Online Store, or as Information File A3-10, Iowa Farm Custom Rate Survey, on the Ag Decision Maker website.