Custom farm operations: What to charge?

It’s once again time to document what farmers are actually paying or charging to help out their neighbors with machine field operations. Custom rate guides are popular documents in those states that continue to do the survey legwork; unfortunately, many do not.

As is the case each year, several states have updated their information from the previous year. Conversely, some states have discontinued their survey efforts due to budget cuts. Only a few states survey custom operators every year (for example, Iowa); many have gone to doing a survey every two to four years. In some cases, it is the state’s agriculture statistics service that leads the effort while in others it is the land-grant university.

The methods by which surveys are completed vary somewhat from state to state. Sometimes fuel is included, and in other cases, it is not. Some states report more detail than others; for example, there may be separate line items for different large bale sizes. Many are based on actual farmer and custom operator surveys, but a few states derive their charges from data compiled in surrounding states.

Most states cite the range of reported charges for a particular operation and the average charge. In addition, some states break out survey results by regions and others just offer a state average. Users need to keep in mind that values are derived from a variety of individual situations — new and old equipment, large and small equipment, and so forth.

Finally, custom rates are usually higher than actual machinery costs. This has to be the case if profit is to be made. If you’re looking for insight into actual costs to operate machinery, the University of Minnesota is usually recognized as providing the gold standard with their “Machinery Cost Estimates” publication that is updated each year (Illinois and Iowa State also offer some help).

Below is a list of states with a link to their most recent custom rate guides. Only states that have updated rates since 2016 are included. Idaho, Mississippi, and Tennessee dropped off from last year’s list. Unfortunately, states in the South and West are noticeably underrepresented. If you know of a state that was missed, please feel free to contact me (mrankin@hayandforage.com) and it will get added. Some states may be in the process of updating their survey but have not yet posted results.