As would be expected with increasing fuel costs, average 2013 custom rates for farm work have a1so increased, compared to 2012 custom rates. Most custom rates for farm work in 2013 are 3-5% above the rates for similar operations in 2012, with an average increase of about 4%. In addition to higher fuel costs, increasing cost for new and used machinery and rising repair costs are also factors in the higher custom rates.
These results are based on the annual “Iowa Farm Custom Rate Survey” coordinated and analyzed by Iowa State University. The survey samples 249 custom operators, farm managers and ag lenders on what they expect 2013 custom farm rates to be for various farm operations. The survey summary lists the average custom rate and the range for various tillage, planting, fertilizer and chemical application, grain harvesting and forage harvesting functions on the farm. The survey also includes many miscellaneous faming practices, lists average machine rental rates for some equipment, and includes a formula for estimating average machinery rental rates. The survey also lists average custom farming rates for corn, soybeans and wheat. Over the years, the average custom rates for farm operations in southern and western Minnesota has been very close to the average Iowa custom rates. Read the complete 2013 Iowa Farm Custom Rate Survey(pdf).
All listed custom rates in the Iowa survey results include fuel, labor, repairs, depreciation, insurance and interest, unless listed as rental rates or otherwise specified. The average price for diesel fuel assumed for the quoted custom rates was $3.50/gal. A fuel price increase of 50¢/gal. would cause most custom rates to increase by approximately 5%.
These average rates are only meant to be a guide for custom rates, as actual custom rates charged may vary depending on further increases in fuel costs, availability of custom operators, timeliness, field size, etc. Following are the average custom rates for some common farming practices based on the survey.
Custom Farming Rates
(Includes tillage, planting and harvesting costs)
Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at email@example.com.