The 2012 Nebraska farm custom rates are now available. The publications are the result of surveys that have been repeated on even numbered years for some time, according to Roger Wilson, farm management specialist at the University of Nebraska-Lincoln Department of Ag Economics.
The surveys and the resulting publications are done in two parts. Part I contains the rates for the spring and summer custom operations. These include tillage, planting, haying, fertilizer application and spraying operations, as well as small grain harvest.
Part II contains rates that generally relate to fall operations, grain harvesting, making and hauling silage, hauling hay, cattle and other commodities and harvesting other crops.
The surveys are not based on a random sample of custom operators, but rather the information from operators who chose to share that information, Wilson says. Tabulated results include the number of operators reporting (results are not reported unless at least three operators have replied), the average of the reported rates, their range and the most common rate if there is one.
Survey results are tabulated on a statewide basis and by eight geographic areas called crop reporting districts, established by USDA's Agricultural Statistics Service. A map of Nebraska is included in the publication showing the boundaries of these districts.
The number of responses vary considerably for the different operations. Only three people in the entire state reported planting row crops using a lister with a band applicator. This contrasts to 149 operators who reported a rate for combining soybeans.
There were more total responses for combining corn, but they were distributed among different pricing schemes. Some operators reported a flat charge per acre for combining irrigated and dryland corn. Others reported charging on the basis of the number of acres and the bushels of corn harvested.
Still others reported a flat charge per acre, but with an additional charge if the yield exceeded a given number of bushels per acre. The average yield before the extra bushel charge kicked in was 142 bushels per acre for irrigated corn and 116 bushels per acre for dryland corn.
Other harvested grain crops included in the survey were wheat and other small grains, grain sorghum, millet, dry beans and sunflowers.
The range of reported rates can be substantial. Wilson says the reported rate for combining irrigated corn goes from $12 to $50 per acre. It is possible that some custom providers are charging only enough to cover the direct costs, resulting in a very low rate. Field conditions such as size and terrain vary throughout the state, which could affect maximum rates, he adds.
While most rates are reported on a per acre basis, some are reported on a per hour basis. The variation in rates per hour appears to be greater than the rates per acre. As an example, the cost for chopping, hauling, filling and packing corn silage varies from $75 to $800 per hour. Part of the reason for this variation, no doubt, is the quantity of silage that can be harvested per hour.
Custom operators varied considerably, which is another reason for rate variations. One reported doing custom work on 30 acres during the year, while another reported doing custom work on 9,000 acres.
One respondent reported doing custom work for eight hours during the year, while another reported 4,000 hours spent doing custom work, according to Wilson.
While most of the survey consists of rates for field operations such as tillage, planting and harvesting, it includes a number of operations that some may not be aware of. Drying grain, cleaning and treating various kinds of seed, elevating grain and checking pivots are some examples.
In addition, the publications include rates for some livestock operations such as checking cattle, grinding feed and hauling livestock. Rates for some other related operations include waste handling, mowing pasture, digging post holes, driving posts and trenching.
There are also rates for renting various sized tractors, hiring labor, and additional charges for employing an auto-steer system.
The information contained in the publications should be used only as a guide, Wilson says. There are often good reasons for the variability in rates, and those mentioned are not intended to be inclusive, but illustrative of the differences that exist among custom operators, prevalent conditions and specific field situations. These differences need to be accounted for if an equitable rate is to be determined. Because of the diversity inherent in agriculture, Wilson says that equal is not necessarily equitable.
These publications are available online at http://go.unl.edu/customrates.
Printed copies may be obtained from the University of Nebraska-Lincoln Publications Warehouse, P.O. Box 830918, Lincoln, NE 68583-0918. The cost for printed copies is $1.25 each.
Contact Wilson at 402- 472-1771 or email [email protected].
Source: University of Nebraska-Lincoln's Cornhusker Economics online newsletter