What will custom work cost this year?
Having some custom work done on your farm this year? It'll cost you more than last year, but how much? Kansas State University Extension ag economist Kevin Dhuyvetter tallied up the numbers recently, showing an increase of between 5% to 9% for jobs ranging from planting to custom harvesting.
Those increases are all influenced most by diesel fuel prices, which Dhuyvetter says will average around 42 cents more per gallon than they did in 2010.
For custom planting, it will cost you anywhere from 35 to 75 cents more per acre more this year as it did last year, Dhuyvetter says, while chemical application costs will grow by 2.5% to 8%. "The projected increase for anhydrous ammonia application is 8.6% ($0.88/acre), which would be expected to be higher, as this operation uses more fuel than the other application methods," he adds. "The other larger increases were aerial applications of herbicide and insecticide (8.1% and 6.7%, respectively)."
The same range is true for custom tillage work, with most price increases falling in the 5% to 6% range. The operations requiring the most fuel, just like custom planting, lead the way. "The largest increases are for deep chiseling (8.4% or $1.22/acre) and moldboard plow (8.1% or $1.14/acre)," Dhuyvetter says. "This is what would be expected given that these two operations represent the most fuel intensive operations and fuel prices are projected to be up $0.42/gallon."
Because the yield increase from last year to the 2011 crops will likely be lower than the previous year-over-year difference, Dhuyvetter says the increase in harvesting rates is the smallest of all custom jobs regardless of how it's charged. Most custom harvest rate increase for corn and soybeans will fall in the 6.5% to 8.5% range, with corn and sorghum to be closer to 9% higher than last year. Custom harvesting for irrigated corn will average around 5.3% more than the 2010 crop.
"Custom harvest rates tend to have a fixed rate per acre and an extra charge per bushel for yields above some fixed level and a hauling charge per bushel. The models are suggesting high yield levels have been pretty stable over time," Dhuyvetter says. "Increases for corn, soybeans and sunflowers follow similar patterns, but the increases from 2010 are slightly lower."