Custom farming rates up slightly from last year, survey shows
If you rely on custom farming for part of your earnings, you should see a slight increase in that income stream this year, according to a survey conducted in Iowa.
The 2010 Iowa Farm Custom Rate Survey was conducted earlier this year and shows a "small, but consistent" increase in custom rates for the coming season, according to Iowa State University Extension economist William Edwards. Some field operations showed no change, while tillage was up 1% to 2% over last year and harvesting rates were up just under 1%, the survey indicated.
For 2010, the survey shows the average custom rates for Iowa for the following field operations:
- Chisel plowing, per acre: $13.30
- Planting, per acre: $14.20
- Spraying, per acre: $6.10
- Combining corn, per acre: $29.90
- Combining soybeans, per acre: $28.70
- Baling small square bales, per bale: $0.50
- Custom farming, corn, per acre: $102.40
- Custom farming, soybeans, per acre: $91.05
- Machinery operating wage, per hour: $11.70
"Thirty percent indicated that they performed custom work, 18% indicated that they hired work done, and 52% indicated that they did both," Edwards says of the almost 200 farmers responding to the survey. But, that's not to say these values are a one-size-fits-all solution.
"These values are intended only as a guide. There are many reasons why the rate charged in a particular situation should be above or below the average. These include the timeliness with which operations are performed, quality and special features of the machine, operator skill, size and shape of fields, number of acres contracted, and the condition of the crop for harvesting," Edwards adds. "The availability of custom operators in a given area will also affect rates."
One of the factors that relegate these numbers to estimates only, Edwards says, is technology. Sometimes, farmers can offer more value because of new tech tools like GPS mapping and yield monitoring. That makes some of the survey numbers a basis on which a custom farmer could tack on a few more dollars for the services they provide, depending on their technology toolbox.
"The extra charge for GPS mapping for harvesting grain was $2.20 per acre on average, with a range of $.50 to $4.00," Edwards says of some of this year's survey numbers. But, he adds the services rendered through new technology have to benefit the landowner, not the operator. For example, autosteer is of value to the operator, but the ultimate results for the landowner may not be different enough to justify an additional cost.
"An extra charge is justified only if it benefits the landowner, not just the operator," Edwards says. "It is probably up to the custom operator to convince the landowner that the extra service is of value to him or her."