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Oklahoma Farm and Ranch Custom Rates, 2019‑2020

This Current Report summarizes data collected from Oklahoma farmers, ranchers and custom operators during the fall of 2019. Respondents were recipients of a mailing by the Oklahoma Agricultural Statistics Service. Custom work is defined as machine operations performed for the customer with the custom operator furnishing the machine, fuel, labor and other inputs directly associated with the machine. Custom operators do not usually furnish materials such as seed or fertilizer unless it is explicitly stated. The change in custom rates was mixed since the 2017 survey. While the relative low fuel price environment over the past several years has stabilized custom rates, higher labor costs as well as machinery repair and ownership costs contribute to  higher rates in many situations. Approximately 690 surveys were returned with usable data.

 

Summary Procedure

The rates quoted herein were collected by a survey of both farmers and custom operators. A list of over 190 operations was provided from which each respondent quoted rates for only selected operations. Some respondents quoted rates for only one or two operations while others were familiar with rates for many of the machines listed. Fair rates are negotiated. Regional or state average rates may be used as a beginning point for discussion. However, differences in operations, requirements, and circumstances may impact rates.

 

The rates summarized on the inside pages were edited to remove those replies for which the respondent’s interpretation of the information being requested did not match the interpretation of other respondents.

 

Interpreting the Rate Tables

A statewide rate summary for each operation is quoted in the included table. If available, separate quotes are listed for each area of the state as shown in Figure 1. The number of estimates obtained, the average rate, and the median rate are shown. The average rate for a specific operation provides an estimate of the prevailing charge with its reliability improving as the number of responses increase.  Median values provide an additional measure of the central tendency of the survey response distribution.  In most cases the number of observations was insufficient to allow statistical analysis. Results must be interpreted, therefore, with these limitations in mind.

 

Regions used in reporting custom rate survey results.

Figure 1. Regions used in reporting custom rate survey results.

 

Figure 2 shows the distribution of survey responses for operations with at least 32 observations. For example, a distribution of 119 responses for a baling a 5-foot width round bale is one of several graphs shown. Eight percent reported a custom rate less than $14 per bale, 46 percent reported a custom rate between $14 and $17 per bale, 33 percent reported a custom rate between $17 and $20 per bale, 11 percent reported a custom rate between $20 and $23 per bale, and 3 percent of the respondents reported a custom rate of $23 or more per bale.

 

If you are interested in a rate quotation for a specific operation in an area which shows a small number of reports, consider rates for other areas of the state where the operation is more common or refer to the statewide summary. Additional adjustments for field size, terrain and soil type may be necessary.

 

Table. Statewide rate summary

 TILLAGE
 OPERATION  Units Oklahoma No. Oklahoma Avg. Oklahoma Median West No. West Avg. West Median East No. East Avg. East Median
  Chisel plowing $/acre 7 14.11 12.5            
  Surface chisel $/acre 6 11.17 11.75            
  Discing - offset $/acre 24 12.86 12.5 19 12.72 12.5 5 13.36 15
  Discing - tandem $/acre 21 13.04              
  Blade or wide sweeps $/acre 9 11.56 10            
  Vertical/turbo tillage $/acre 7 14.14              
  Spike tooth harrow $/acre 6 10 10            
  Field cultivating $/acre 8 12 12            
                     

 

 FERTILIZER AND CHEMICAL RESULTS
 OPERATION  Units Oklahoma No. Oklahoma Avg. Oklahoma Median West No. West Avg. West Median East No. East Avg. East Median
  Applying bulk dry fertilizer $/acre 84 7.82 5 64 7.42 5 20 9.12 4.75
  Renting bulk dry fertilizer applicator $/acre 10 10.66 4.25            
  Applying liquid fertilizer $/acre 37 7.66   29 7.84 5 8 6.99 7
  Applying liquid fertilizer, side-dress $/acre 9 17.34              
  Applying anhydrous with knife applicator $/acre 6 12 12            
Ground appl - herbicides with   boom sprayer $/acre 60 7.6 6 46 7.27 6 14 8.7 7.75
       Ground appl - herbicides, liquid broadcast or banded $/acre 8 7.31 6.75            
Ground appl - herbicides, dry broadcast or banded $/acre 6 8.67 7            
  Air application - herbicides $/acre 27 9.46 8 20 9.57 7.5 7 9.14 8
Ground appl - fungicides with boom sprayer $/acre 11 5.55 5            
  Air application - insecticides $/acre 8 7.72 7.5            
  Ground application -desiccants $/acre 27 7.57 6 17 5.84 5 10 10.5 7.5
  Air application - desiccants $/acre 9 8.83 8            
  Air application - growth regulators $/acre 5 14.99 16            
                     

 

 PLANTING
 OPERATION  Units Oklahoma No. Oklahoma Avg. Oklahoma Median West No. West Avg. West Median East No. East Avg. East Median
Air Seeder - conventional tillage, small grains w/fertilizer $/acre 15 16.63 17            
Air Seeder - conventional tillage, small grains w/o fertilizer $/acre 10 15.7 16            
  Drill small grains - conventional tillage $/acre 29 15.33 15            
  Drill small grains - no-till $/acre 8 19 18            
  Broadcasting seed $/acre 6 10.25 11            
  Sprigging bermuda grass $/acre 5 39.1              
  Plant cotton -  conventional tillage $/acre 5 12.2              
                     

 

 HAYING
 OPERATION  Units Oklahoma No. Oklahoma Avg. Oklahoma Median West No. West Avg. West Median East No. East Avg. East Median
  Mowing hay $/acre 31 14.68 15 22 15.14 16 9 13.56  
  Raking hay $/acre 30 5.57 5 22 5.14 4 8 6.75 5
  Swathing $/acre 122 16.01 16 116 16.03 16 6 15.7 15.75
Small square bales Baling a small square bale  $/bale 14 1.53 1.5 6 1.18 1.23 8 1.79 1.75
Cost of all haying operations (cutting to stacking sm squares) $/bale 6 2.63 2            
Flat rate for hauling small square bale, other trailer $/bale 10 1.07 1            
Large square bales Baling a large square bale, 3-foot width $/bale 5 13 12            
Baling a large square bale, 4-foot width $/bale 9 22 22            
Large round bales Baling a round bale, 4-foot width $/bale 29 16.62 16 15 15.53 15 14 17.79 20
Cutting, raking, baling round bales,  4-foot width $/bale 96 21.61 22 21 21.29 22 75 21.69 21
 semi-trailer $/bale 6 5.67 5            
 Flat rate for hauling round 4-foot width bales, other trailer $/bale 10 5.06 5            
  Baling a round bale, 5-foot width $/bale 119 16.65 16 96 16.33 16 23 18.01 20
Cutting, raking, baling round bales, 5-foot width $/bale 225 22.34 23 96 21.2 20 129 23.18 23
Flat rate for hauling round 5-foot width bales, semi-trailer $/bale 9 7.65              
Flat rate for hauling round 5-foot width bales, other trailer $/bale 37 5.68 5 13 5.69 5 24 5.67 5
Cost of all haying operations (cutting to stacking round bales) $/bale 63 24.48 25 17 24.92 25 46 24.32 24.81
                     

 

 SMALL GRAIN HARVEST
 OPERATION  Units Oklahoma No. Oklahoma Avg. Oklahoma Median West No. West Avg. West Median East No. East Avg. East Median
  Combining wheat & sm. grains (flat rate)  $/acre 56 22.97 23              
  Base rate for combining small grains $/acre 28 23.57 24            
      extra charge per bushel $/bu. 28 0.23 0.24            
      for excess over XX bushels/acre bu. 28 21.21 20            
  Flat rate for hauling small grains $/bu. 19 0.22 0.23            
                     

 

 LIVESTOCK OPERATIONS
 OPERATION  Units Oklahoma No. Oklahoma Avg. Oklahoma Median West No. West Avg. West Median East No. East Avg. East Median
  Artificial insemination, cattle $/head 13 12.65 10 5 13.1 10 8 12.38 11
  Branding cattle $/head 19 2.11 2 14 2.01 1.8 5 2.4  
  Castrating cattle $/head 32 4.25 3.63 21 4.04 4 11 4.65  
  Chute fee, cattle $/head 17 2.96 3 9 3.31 4 8 2.56 2.5
  Pregnancy test cattle $/head 32 4.73 5 19 4.86   13 4.55 5
  Processing cattle $/head 5 6.49              
  Worming cattle $/head 15 4.67   10 3.78 3.47 5 6.45  
  Hauling cattle semi truck $/mile 16 4.34 4            
  Hauling cattle flat truck $/mile 5 2.66              
  Hauling cattle other method $/day 5 202              
  Hauling other livestock semi truck  $/mile 14 3.88 3.9 6 4.17 4.25 8 3.67 3.78
  Hauling other livestock gooseneck   $/mile 14 3.5 3.79 5 4.3 4 9 3.05  
                     

 

 Miscellaneous
 OPERATION  Units Oklahoma No. Oklahoma Avg. Oklahoma Median West No. West Avg. West Median East No. East Avg. East Median
  Picking up pecans (% for owner) % 5 50 50            
  Brush hogging $/day 5 386              
  Brush hogging $/hour 35 48.4 50 12 67.08 82.5 23 38.65  
  Clearing cedar trees $/hour 16 112.19 102.5 11 123.18   5 88  
  Dozing (D6 or smaller) $/hour 46 115.6 115 28 125.18 125 18 100.69 100
  Dozing (D7 or larger) $/hour 18 137.69 140 10 143.83 145 8 130 127.5
  Welding $/hour 15 45.33 40 10 50 50 5 36  
Building new fence w/materials  (4-6 wire, steel posts) $/hour 6 28.13 29            
Building new fence w/materials (4-6 wire, steel posts) $/mile 28 5644 5000 16 4986 4500 12 6522 5550
Building new fence w/o materials
(4-6 wire, steel posts)
$/hour 10 23.64 17.82 5 26.16   5 21.13  
Building new fence w/o materials (4-6 wire, steel posts) $/mile 23 3603   15 3518   8 3761 3828
Fence maintenance - inspection and minor repair $/hour 14 20.8 13.5 5 22   9 20.14 10
  Fence removal $/mile 5 1542              
                     

 

 MACHINERY RENTAL
 OPERATION  Units Oklahoma No. Oklahoma Avg. Oklahoma Median West No. West Avg. West Median East No. East Avg. East Median
  Skid steer loader $/hour 9 60.11              
                     

 Median values that represent an individual operation are withheld.

 

Reporting Regions

 Area rates are summarized for the State of Oklahoma as shown in Figure 1. Regional differences are apparent in the rate table with higher rates prevailing when:

  • Fields are small.
  • Soils are heavy.
  • Slopes are steep.
  • Machines are scarce.
  • Custom operators are not available.

 

Rates tend to be lower than expected when exchange work is common between relatives and neighbors. Under these circumstances, fixed costs of ownership such as depreciation and interest on investment (sometimes even labor) tend to be discounted when a rate is established for a particular job.

 

Custom Service vs. Ownership

Individual circumstances–cash flow, ownership and operating costs, labor availability, reliability and timeliness of custom operators, pride of ownership–will influence an individual’s decision on whether to buy or lease machinery and equipment or custom hire work done. A worksheet at the end of this article is designed to help evaluate the cost of machinery ownership and operation.

 

Possible Advantages of Using Custom Operations

•    Ownership costs are avoided.
•    Capital and labor can be channeled to other uses.
•    Machine use can be readily adjusted to changes in crop mix and market conditions.
•    Specialized operations may benefit from experience and skilled operator.
•    Jobs may be completed faster using several machines.

 

Possible Disadvantages of Using Custom Operations

    •    Service may not be available at the best time.
    •    Reliability of the custom operator may not be known.
    •    Rates may be excessive in special situations.

 

Each manager must choose the best combination of owned and hired machines. The quotations here will be helpful in estimating custom costs and to provide a base figure for agreement on a rate when well established local rates are not available. If you have questions, ask your Extension Educator- Agriculture or Area Agricultural Economics Specialist for additional information.

 

Considerations to Keep in Mind

Keep in mind there is a wide variation in rates charged for most jobs, even within the same geographic area, partly because some custom work is done for friends, relatives, and neighbors at reduced rates, partly because some custom work is done late by farmers who do their own work first and therefore do not attempt to include the full cost of machine ownership in their rates, and partly because it is easy to under‑estimate the full cost of ownership and operation of machinery.  

 

A small number of reports for a given machine in a particular area may not be representative. In this case, it is particularly important to check rates in other areas or statewide where a larger number of reports are found.

 

Costs of Ownership and Operation

The management decision to own a machine, to custom hire operations performed, or to custom perform operations is partially determined by cost, which is heavily influenced by the amount of use realized over the period of machine ownership.  Estimates of fixed and variable costs per hour can be approximated using the following steps.  Unless accurate records are used to estimate costs, variability in machine and operator efficiencies can cause actual results to be significantly different from estimated results.

 Costs of Ownership and Operation
Steps Estimate for Formula worksheet Estimated amount
A Acres per hour Acres covered in normal day ÷ hours in normal day = acres ÷ hours  = =
B Average investment (Original cost + Trade-in value) ÷ 2 = ($  + $) ÷ 2 = = $
C Annual Depreciation (Original cost – Trade-in value) ÷ (Number of years owned) = ($ – $) ÷ years = = $
D Annual Interest Average Investment x Interest rate = $ x % = = $
E Annual Taxes Average Investment  x   Personal Tax rate (1)   $ x % =  = $
F Annual Insurance Average Investment  x  Insurance rate(2)   = $ x % = = $
G Total Annual Ownership Costs (Sum of C through F) = $
     
H Ownership Costs per acre Ownership Costs ÷ Acres Per Year = $ ÷ acres/year = = $
I Repairs Per Acre Repairs (3) ÷ Acres Per Year $  ÷ acres/year = = $
J Fuel Cost Per acre Price  x  Per Hour  ÷  Acres Per Hour = $ / day ÷ acres / day = = $
K Labor Cost Per acre Daily Wages ÷  Acres Per day = $ /day ÷ acres/day = = $
L Total Cost Per Acre = Sum of items H through K above = $
  • (1)  Use local tax rate if known.  One to two percent is a reasonable “guesstimate”.
  • (2)  Use own insurance rate if known.  One-half to one percent is a reasonable “guesstimate”.
  • (3)  Use your repair expense data, if available.  One percent of original price for each year machine is kept is a rough estimate; e.g., 10% per year if machine is to be used for 10 years.

 

 

Roger Sahs

Extension Assistant Specialist

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