university of illinois custom farming rates 2021 university of illinois custom farming rates 2021

The total machinery cost per acre ($9.58 per acre) for the case farm is under these custom rates, indicating that it is economical for the case farm to own a field cultivator. Overall, corn and soybeans have about the same projected profitability in 2022: $61 farmer return for corn and $67 farmer return for soybeans, giving a difference of -$6 per acre. 7 ag stories you cant miss March 3, 2023, Jill Reiter, Virginia State FFA Vice President, Soymeal rally sends soybeans higher on the week. The rates presented in this publication represent the responses of a statewide survey conducted from February to March 2013 by Mississippi State University Extension agricultural economists. farmdoc daily (11):147, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, October 26, 2021. These estimates are useful for determining custom rates and for analyzing machinery costs on farms. The Gardner Payment Calculator provides estimates of expected payments and likelihood of payments for ARC-CO and PLC. May 25, 2019. From time to time, Prairie Farmer gets requests for the custom rate estimates on various field operations. %PDF-1.6 % Interest represents the opportunity cost associated with using scarce funds to purchase a machine. Includes tractor overhead, implement overhead, fuel and lube, and labor: Depending on your situation, you may want to consider the following spraying and ammonia application total costs from 2019: Fuel costs are based on $2.50 per gallon for diesel fuel. Farm Progress is part of the Informa Markets Division of Informa PLC. Tables 3 and 4 present machinery costs for a self-propelled sprayer operation on the case farm. First, a case farm in north central Indiana with 3000 acre of corn and soybeans was assumed. Spraying. Includes tractor overhead, implement overhead, fuel and lube and labor: Includes tractor overhead, platform overhead, fuel and lube, and labor: . A comparison of the two sets of rates provides a baseline that can be used to evaluate costs of owning equipment and performing field operations versus outsourcing. "Machinery Cost Estimates: Tractors." "Management Decisions Relative to High Nitrogen Fertilizer Prices." In addition to the costs outlined in table 3, the costs in table 4 include fuel, lubrication, and labor costs. The $230 per acre does not reflect the over $1,300 high price point for anhydrous ammonia in November. Differences in corn and soybean returns will be influenced by corn, soybean, and nitrogen fertilizer prices. Although the actual costs will vary from farm to farm, and are dependent on the number of acres and the size or capacity of the equipment used, the averages presented here can be used as a guide. It is an annual summary of such records obtained from farmers cooperating with University of Illinois Extension, the Department of Agricultural and Consumer Economics, and the Illinois Farm Business Farm Management (FBFM) Association. Illinois Farm Management Handbook. hb```]O@(9j0;sLUG\S%mN3/,w```6 q(f`4``fg4bx#C]e^T&2@f`{ 6Vy,(! November 2021 (11) October 2021 (10) September 2021 (12) August 2021 (14) July 2021 (12) . Shawn and Kristy Freeland with some of their cattle, Corn with fuel pump handle representing ethanol fuel. Total costs will be at all-time highs in 2022. What impact would a recession have on farming. This report is based on farm income and earnings data on Illinois farms. Respondents were recipients of a mailing by the Oklahoma Field Office, USDA-NASS. Historically, cost of production, Introduction High farm input costs, especially for fertilizer and fuel, have reinvigorated arguments for farm support programs where payments are triggered when the cost of production rises. These budgets represent average returns no matter the preceding crop and are summarized from farms enrolled in Illinois Farm Business Farm Management (FBFM). Custom rate guides are popular documents in those states that continue to do the survey legwork; unfortunately, many do not. It is also important to check your report to become an informed consumer of information being used to make decisions about you. Spraying. In certain weather and field conditions, tillage operations may be necessary to prepare the field, while other times tillage may not be necessary. Our YouTube channel includesfarmdocwebinars and publication related videos. For seven of the nine tillage operations compared, the economic cost of owning the machinery and performing the task is less than the average custom rate cost per acre, with all but one considerably lower than the average custom rate cost. %%EOF Year Applies: 2021. For a detailed statement, please see the University of Illinois Copyright Information and Policies here. Schnitkey, G. Crop Budgets, Illinois, 2022. Illinois Farm Management Handbook. Black piggy bank with downward trend line representing recession. Langemeier, Michael. Fuel costs are based on a $2.25 per gallon price for diesel fuel. Our YouTube channel includes farmdoc webinars and publication related videos. Edwards, William. Liquid fertilizer applicator at $23.50 per acre. For example, a generational family farm may have different levels of ownership, own separate pieces of machinery, or have acreage shares that dont align with ownership, and these costs can be used as a resource for settling with other farm members. Tillage passes that may fall in this category are those associated with heavier, deep tillage that are not performed on all acres in every year. Iowa State University custom farming surveys are useful for outsourcing decisions. Fuel use on a 310 horsepower tractor is estimated at 13.6 gallons per hour. For a detailed statement, please see the University of Illinois Copyright Information and Policies here. Uncertainty exists about whether fertilizer prices will continue at high levels. Crop Insurance Summary of Business Tool (Sheet), Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Post Application Coverage Endorsement Tool, Biomass Crop Budget Tool Miscanthus and Switchgrass, Illinois Soil Productivity and Yield Utilities, Illinois Crop Budgets and Historic Returns. For farms in that situation, the cost of retaining that equipment to use as needed is comparatively lower than the economic cost of a newer implement because depreciation and interest make up a large portion of the economic costs. The latest from the Gardner Agriculture Policy Center. Costs rise dramatically with lower use because much of the tillage related cost is associated with depreciation and interest on owning the equipment. The $25 projected increase considers these variations and gives an average. In situations, where a farmer determines it is cost effective to perform a tillage operation, the next step in a cost management approach is to determine whether it is more cost effective to own and operate the tillage implement or to outsource the operation. Informa Markets, a trading division of Informa PLC. "2022 Crop Budgets Contain Higher Costs." These estimates are useful for determining custom rates and for analyzing machinery costs on farms. Full video of the committee, Last week the Congressional Budget Office released its ten-year estimates for the mandatory farm bill programs for Commodities (Title I), Conservation (Title II), the Supplemental Nutrition Assistance Program (SNAP, Title, [vc_row][vc_column][vc_column_text]The Agricultural Improvement Act of 2018 is scheduled to expire in the 2023 calendar, crop, and fiscal years, initiating the reauthorization process on the legislative calendar. A 21-foot chisel plow used on 882 acres has a cost of $16.00 per acre, while a 27-foot chisel plow used on 1,134 acres has nearly the same cost at $15.90 per acre. More detail on the approaches used to estimate overhead costs are given in the Machinery Cost Estimates: Tractors publication. Using this information the total machinery per acre was $3.90. Iowa State University Extension and Outreach, Ag Decision Maker, A3-29, May 2015. An additional amount for profit should be added to our cost estimates, as we have not added an amount for returns. endstream endobj 2432 0 obj <. Understanding the difference in the intent of the two reports, and acknowledging some differences in general assumptions (for example, fuel rate of $2.50 versus $2.63 per gallon), explains the potential differences in rates reported from each source. The articles are written by Extension Specialists. 164 0 obj <>stream Corn prices have been increased from $5.30 per bushel in August, In 2021, the total noncapital living expenses of 1,213 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $85,828or about $7,200 a month for each family, In the August version of the 2023 Illinois Crop Budgets, wheat plus double-crop soybean is projected to be much more profitable than stand-alone corn and stand-alone soybeans in southern Illinois., Illinois crop budgets for 2022 have been revised from their December release (farmdoc daily, December 7, 2021). NASS county yields are not the same yields that will be used to calculate Agriculture Risk Coverage at the county, Farmers will again have until March 15 to make commodity title program selections. Authors: Dale Lattz and Gary Schnitkey. A chisel plow in that size range would be cost effective to own and operate on 735 acres. This publication presents crop budgets for three regions in Illinois: northern, central, and southern Illinois. Similar results for northern Illinois, central Illinois low-productivity farmland, and southern Illinois are available in the Revenue and Costs for Illinois Grain Crops publication. Planting. University of Illinois Extension provides equal opportunities in . If you are figuring what it costs you to make hay on your farm, add mowing, raking, and baling at 20.20 per bale ( Machinery Cost Estimates, University of Illinois Extension, June 2015 ). The "Ohio Farm Custom Rates 2022" publication reports custom rates based on a statewide survey of 223 farmers, custom operators, farm managers, and landowners conducted in 2022. Repair and maintenance costs for a particular machine can vary substantially among farms. Total non-land costs are projected at $755 per acre for corn, a $124 increase over the $631 per acres cost in 2021 (see Table 1). This program calculates per-acre budgets for different crops and a whole farm budget and includes breakevens. Summary of costs for Field Operations, Havest Operations, Tractor and Forage Operations. Learn, Introduction Knowledge, experience, and collaboration work hand in hand with one another to improve farm output per unit of input (i.e., productivity). A farm utilizing a piece of tillage equipment on fewer acres could purchase a smaller, less expensive implement and reduce cost per acre. Total costs will be at all-time highs in 2022. 2021 Custom Machine Work Rates By Ned M. Birkey, MSU Extension Educator Emeritus, Spartan Ag; July 21, 2021 News release With the 2021 spring planting season wrapping up with wheat harvest and . Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily. The purpose of this publication is to provide information on custom work . Check out the entire list of cost estimates at Farmdoc: A 10th-generation agriculturist, Sierra Day grew up alongside the Angus cattle, corn and soybeans on her familys operation in Cerro Gordo, Ill. A 40-foot chisel plow used on 1,680 acres has a cost of $11.90 per acre, while a 47-foot chisel plow used on 1,974 acres has nearly the same cost at $12.10 per acre. For a detailed statement, please see the University of Illinois Copyright Information and Policies here. Significant changes from the initial release are increased corn prices, soybean prices, and non-land costs. . These decisions are complex because a decrease in one type of expense may be offset by an increase in other costs, or a change in expected yield. Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Briomass Crop Budget Tool Miscanthus & Switchgrass, Illinois Soil Productivity & Yield Utilities, Farmland LEasing Facts Sheets & Pricing Information, Department of Agricultural and Consumer Economics. Each year, eHay Weekly offers readers a one-stop shop for accessing custom field work rate information from those states that have done . Ukraines corn and wheat production and exports are of broad interest, Bloomberg writer Agnieszka de Sousa reported today that, Global food costs edged down again, extending their retreat to the lowest in 17 months, although consumers continue to feel the pinch, Reuters writers Rod Nickel and Pavel Polityuk reported yesterday that, Ukraine sees no need to limit wheat exports for the upcoming 2023/24 July-June season, as the winter harvest looks to, Reuters writer Andrea Shalal reported yesterday that, The United States will consider all options, including a formal trade dispute panel, unless Mexico addresses Washingtons concerns over Mexicos plan to limit, In its MarchMarket Monitorreport, the Agricultural Market Information System (AMIS) indicated that, With no end in sight to the war in Ukraine and threats of further escalation, uncertainty continues to, Reuters writer Julie Ingwersen reported yesterday that, Crop insurance policies that guarantee prices for the 2023 growing season are the highest since 2011 for corn and the second-highest on record, Reuters writers Jarrett Renshaw and Stephanie Kelly reported yesterday that, The Biden administration is expected on Wednesday to recommend for approval a rule that would allow expanded sales of gasoline. The dynamics of fertilizer prices in conjunction with movements in corn and soybean prices will influence relative profitability of corn and soybeans and acreage decisions. University of Illinois ag economists publish machinery costestimates intended to represent the actual costs associated with individual farm field operations, which can provide a baseline for setting a custom rate to ensure that costs are covered. Estimates are for crops in midwest and southeast states. Central Illinois is further divided, Shows historical cost for the last 5 years and projections for next year. Data collected through the Precision Conservation Management from 2015 to 2019 indicates that light to moderate tillage is associated with higher returns than heavier tillage (farmdoc daily webinar, June 22, 2020). Schnitkey, G., N. Paulson, K. Swanson and C. Zulauf. Gary Schnitkey, Carl Zulauf, Krista Swanson, and Nick Paulson - Gary Schnitkey - Illinois crop budgets for 2022 have been revised from their initial release in July. Several cost items should be included when computing total machinery costs per hour and per acre. Understanding the . Follow these social media channels for updates on farmdoc daily articles, farmdoc events, and ag information from Ryan Hanrahan - the farmdoc social media director. If corn and soybeans prices fall, 2022 net farm incomes could be very low. Based on data collected through the Purdue University Center for Commercial Agriculture 2021 Custom Rates Survey, the person baling the hay on shares today gets 52% of the crop, on average. Several options exist for reducing non-land costs, with this article focusing on tillage related costs. Numerous farms that are either hiring a custom operator or providing custom rate services to other farms use published custom rate surveys. Fertilizer prices have skyrocketed in recent months (see farmdoc daily, October 26, 2021, November 2, 2021, and November 30, 2021). 2474 0 obj <>stream "Machinery Cost Estimates: Field Operations." When comparing total machinery costs to custom hire charges, it is particularly important to include labor costs. Guidelines are available here. Lattz, D. and G. Schnitkey. The total machinery cost per acre ($3.90) for the case farm is under these custom rates, indicating that it is economical for the case farm to own a self-propelled sprayer. Recently released crop budgets (farmdoc daily, August 4, 2020) project losses for corn and soybeans on Illinois farms, given current assumptions for 2021. County yields and market year average (MYA) prices are brought in for a user-specified state-county-crop combination. The average is representative of a 35-foot chisel plow used on 1,470 acres. The farmdoc daily website falls under University of Illinois copyright and intellectual property rights. Depreciation for tax purposes is often accelerated compared to economic depreciation. Includes tractor overhead, implement overhead, fuel and lube and labor: Vertical tillage, rolling basket at $11.70 per acre, V-ripper (shanks only) at $22.50 per acre. Suffice it to say, there is considerable downside risk in the market, and lower prices will result in much lower revenues and returns. Fortunately, ag economists at the University of Illinois keep up on all those numbers, and have an entire listing of costs for various field operations located on their Farmdoc website. ) The computations of interest, insurance and housing, and repair costs assumed that the tractor and implement had one-half of their useful life left. farmdoc daily (11):160, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, November 30, 2021. Often, tillage operations are an option for a farmer to consider, carefully weighing costs and potential benefits. Represents the rate obtained from surveys of actual farm data surveys for 2014 & 2015 from Universities listed below to do this type of . ceres imagaging lindsay irrigation partner. Report with summary of cost to produce beef in Illinois. Summary of index numbers for Illinois farmland values. Projected financial statements and, Illinois crop budgets for 2023 have been revised from their initial release in August (farmdoc daily, August 2, 2022). Or in your area, the person who owned the hay may still have expected half the hay plus up to $1 per bale for your half. And he expects 2021 costs to be 8% to 10% higher than 2019. Corn is projected $15 per acre higher than soybeans in northern Illinois, corn is projected $14 per acre higher than soybean on low productivity farmland in central Illinois, and soybeans are projected to be $1 more profitable than corn in southern Illinois. This publication shows estimated costs for combining, using grain carts, and hauling grain. Iowa Farm Custom Rate Survey was mailed to 327 people by the US Postal Service and 232 people via email in early February 2022. Number 8860726. Table 3 illustrates the computation of depreciation, interest, insurance and housing, and repairs. As indicated in the farmdoc machinery cost estimates publication, acreage decreases of 50% result in 80% increases in costs, on average. One of the best resources for average custom rates is the annual Iowa Farm Custom Rate Survey that is coordinated and analyzed by Iowa State University. This program calculates Agricultural Risk Coverage for County Coverage (ARC-CO), Price Loss Coverage (PLC) payments, and ARC at the Individual Level (ARC-IC). Still, we are projecting . As part of a forthcoming Farm Bill, Congress may consider changes to farm programs to incorporate margins, expected to be defined as the difference between a, Note: This article is based on testimony given before the House Agricultural Committee Subcommittee on General Farm Commodities and Risk Management on June 9, 2022. Credit reports and scores are being used for many decisions such as credit determination and pricing; insurance pricing; government licenses; and employment. Illinois Farm Management Handbook, available by searching University of Illinois farmdoc. From time to time, Prairie Farmer gets requests for the custom rate estimates on various field operations. Similarly, if a farm is providing custom rate services and has a higher cost than the published survey rates, it either needs to charge more or try to figure out how to lower costs per acre. for a look at their summary, including commentary by farm management experts Dale Lattz and Gary Schnitkey. ) It is important to note that machinery costs per acre vary widely among farms. Note that the higher cost, heavier tillage operations are the ones where economic costs are above the corresponding custom rates. These price changes will influence the relative profitability of the two crops. FAST Tools. 0 Custom hay mowing and baling are common in parts of Indiana where people have small patches of hay but don't want to own the equipment needed to mow, rake and bale hay themselves. Table 1 shows corn and soybean performance for 2020, 2021, and 2022 on high-productivity farmland in central Illinois. In 2018, she received her associate degree from Lake Land College, where her time was spent as an active member in clubs such as Ag Transfer club and PAS. for the complete table of custom rates, which also lists tractors of various sizes. The . February 4, 2007. University of Illinois Extension, Farm Business Management, June 2017 (a). Results are included for all regions in Illinois. Most machinery cost estimates are based on a 1,400 acre farm. In all cases, estimated costs went up and ranged from 2% to 19%. These higher fertilizer costs reflect higher prices for diammonium phosphate and potash. A "custom rate" is the amount agreed upon by both parties to be paid by the custom work customer to the custom work provider. The latest in the Illinois Farm Management Handbook. Authors: Bob Battel, Field Crops Educator . FAST (Farm Analysis Solution Tools) are a suite of Microsoft Excel spreadsheets designed to assist those in agriculture make better decisions via user-friendly computer programs. Table gives results for corn, soybeans, wheat,. A $19 per hour rate was used in 2019 compared to a $20 per hour rate in 2021. Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Briomass Crop Budget Tool Miscanthus & Switchgrass, Illinois Soil Productivity & Yield Utilities, Farmland LEasing Facts Sheets & Pricing Information, Schnitkey, G., C. Zulauf, K. Swanson and N. Paulson. Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Briomass Crop Budget Tool Miscanthus & Switchgrass, Illinois Soil Productivity & Yield Utilities, Farmland LEasing Facts Sheets & Pricing Information, Machinery Cost Estimates: Field Operations, Machinery Cost Estimates: Forage Field Operations, 2022 Planting Decisions, Nitrogen Fertilizer Prices, and Corn and Soybean Prices, Department of Agricultural and Consumer Economics.