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May 2008

MACHINERY COST ESTIMATES: HARVESTING

This publication show estimated costs for combining, using grain carts, and hauling grain. These estimates are useful for determining custom rates and for analyzing machinery costs on farms. Costs include overhead (depreciation, interest, insurance, housing and repairs), fuel and labor. Allowances for profit are not included. Charging custom rates at estimated costs should cover costs, but will not generate profits. Adding 5 to 15 percent to estimated costs is appropriate when determining custom rates. Table 1 shows costs of combining corn and soybeans, operating a grain cart, and hauling grain.

Cost Estimates

Formulas published by the American Society of Agricultural Engineers are used in calculating costs for combines and grain carts. All combine costs are based on buying a new combine and holding the machinery for 7 years. Table 2 lists other variables used in calculating costs.

Combine costs in Table 1 can be divided into four categories:

Combine overhead includes depreciation, interest, insurance, housing, and repair charges on the combine. Combine overhead for the combine in Table 1 is $18.00 for corn and $19.80 for soybeans.

Platform overhead includes depreciation, interest, insurance, housing, and repair charges on the grain platform and corn head. Platform overhead for the combine shown in Table 1 is $8.40 for a corn head and $5.00 for soybean platform.

Fuel costs are based on diesel fuel priced at $3.75 per gallon. Lubrication is 10 percent of fuel cost. Fuel costs for the combine shown in Table 1 are $5.00 for corn and $2.90 for soybeans.

Labor costs are based on a $14.50 per hour labor charge. Labor time is 10 percent more than combine operating time.

Combine Size and Costs

Costs shown in Table 1 are for a 265 horsepower combine with a 20 ft. grain head and a 6-row corn head used to harvest 840 acres of corn and 560 acres of soybeans. Appendix Table 1 shows costs for different size combines. Generally, per acre costs decrease as combine size increases, given that acres harvested also increase.

Use and Costs

A major portion of total costs for combines are in overhead items (i.e., depreciation, interest, insurance, housing, and repairs). On an annual basis, depreciation, interest, insurance, and housing costs remain relatively the same regardless of acres harvested. As acres increase, these overhead costs are spread over more acres. Therefore, for a given size combine, costs per acre decline as acres of use increase, as illustrated in Table 3.

Costs for the Grain Cart

Table 4 shows estimates of owning three different sized grain carts. These costs are estimated assuming that the cart is purchased new at 85% of list price and that the machine is held for 10 years. For a 1,000 bushel grain cart, yearly costs of owning a grain cart with a $42,000 list price are $4,620.

Per acre costs will vary based on the amount of use of the grain cart. Table 5 shows estimates of per acres costs for the different sized grain carts. In Table 5, the 1,000 bushel grain cart is assumed to be used on 1,900 acres. This results in grain cart overhead of $2.30 per acre ($4,620 yearly costs from Table 4 divided by 1,900 acres). A tractor with 225 horsepower is used to pull the grain cart. Per hour estimates of tractor costs are $88.55 per hour. Tractor costs were calculated assuming that tractor was used 550 hours per year. Given these estimates, the grain cart has $9.70 of cost for corn harvest and $5.60 costs per acre cost for soybean harvest.

 

Grain Cart Impacts on Combine Costs

Use of a grain cart should reduce per acre combine costs because the combine has to run fewer hours to harvest the same number of acres. Estimates of these cost reductions are shown in Table 6. Each row in this table gives per acre costs for different acres harvested. At 1,600 acres, costs when a grain cart is not used are $31.10 per acre and 212 hours are required to complete the acres. Use of a grain cart is estimated to reduce hours to 193 and per acre costs to $30.16. In Table 5, use of a grain cart reduces combine costs by about $.94 per acre. This decrease will offset some of the costs associated with grain cart use.

Grain cart use may allow one combine to harvest more acres. In these cases, combine costs will be further reduced because increasing acres harvested generally decreases per acre costs.

Grain Hauling Costs

Hauling costs are estimated for moving grain from a field to commercial storage. Hauling costs will vary depending on the miles between the field and the storage. They will also vary depending on terrain, road conditions, and contracting time. The estimate in Table 1 is based on using a semi-truck having a charge of $85 per hour to operate. Estimates in Table 1 assume about one trip per hour.

Stalk Chopping

Corn heads are now available that will chop stalks. For an 8-row corn head, corn harvesting costs without a head that stalks chops are estimated at $29.80 per acre. With stalk chopping, corn harvesting costs are $33.20 per acre (see Appendix Table 1). Stalk chopping adds $3.40 per acre to harvesting costs.

Prepared by: Gary Schnitkey and Dale Lattz, Department of Agricultural and Consumer Economics, University of Illinois


  

Department of Agricultural and Consumer Economics    College of Agricultural, Consumer and Environmental Sciences
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