If you're raising your custom harvesting rates this year and higher fuel prices are the main reason, you're not alone.
Forty-two percent of custom harvesters responding to a recent Hay & Forage Grower survey said their rates are higher this year than last — on average about 11% higher. Among those who gave a reason, 95% implicated fuel prices.
“Increasing fuel costs, along with increases in all other farm expenses, will be a hindering factor in agriculture this year,” wrote one custom harvester.
The rate-hike survey was sent via e-mail to subscribers who do custom harvesting and have provided their e-mail addresses. Responses were cut off after two days, with 94 completed questionnaires returned.
On average, survey respondents expect to custom chop and/or bale 572 acres in 2001. More than 68% of them plan to harvest the same number of acres as last year. About 15% plan to cover more acres and 17% will cut back.
While fuel prices are by far the most frequently cited reason for raising rates, respondents also are concerned about equipment and labor costs. About 25% and 18%, respectively, chose those two cost factors.
While the majority (58%) are not raising rates this year, that does not necessarily mean they don't want to. Of those responding, some checking more than one answer, 56% cited clients' inability to pay more as the reason they are not raising rates. Thirty-seven percent said their current rates result in sufficient profit, and 12% indicated competition from other custom harvesters prevents rate hikes.
Other reasons for holding the line on rates:
“I raised rates last year,” wrote one respondent.
“I'm running older equipment and can't justify an increase for that reason,” added another.
“I custom cut for several small farms with limited resources, so I keep rates low to help keep agriculture/farmland in production in my area,” said a third harvester.
Other notable comments from survey respondents:
“I won't be custom baling this year. There's no profit in it.”
“Costs of repairs and parts have increased, some customers are more demanding, and it never fails — our own hay will be ready at the same time as a custom job.”
“Operating costs are going through the roof.”
The table, courtesy of Doane's Agricultural Report, shows actual 2001 custom rates as reported by custom harvesters from various regions.