Machinery Costs and Management
Transcript of Machinery Costs and Management
![Page 1: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/1.jpg)
Machinery Costs and Management
Dale LattzGary Schnitkey
![Page 2: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/2.jpg)
How is harvest going in your area?
oDoneoOver 75% doneoBetween 50 and 75% doneoBetween 25 and 50% doneoLess than 25% done
![Page 3: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/3.jpg)
Topics1. Methodology
2. 2021 Cost Estimates
3. Comparison to 2019 costs
4. Machinery Management
![Page 4: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/4.jpg)
Methodology
![Page 5: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/5.jpg)
![Page 6: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/6.jpg)
![Page 7: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/7.jpg)
Background•Often used as a guideline in setting custom rates
•Done every 2-years
•Cost estimates based on new costs
•Using older machines should not matter
•Unlike Iowa State which is a survey of custom rates
![Page 8: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/8.jpg)
What is included in costsOverhead⁃Depreciation⁃ Interest⁃ insurance and housing
Variable⁃ Repairs⁃ fuel and lubrication⁃ labor
Formulas developed by the American Society of Agricultural and Biological Engineers are used to calculate costs.
![Page 9: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/9.jpg)
Factors Used in Calculating CostsPurchase price 85% of list price
Interest rate 4.5% of remaining value
Insurance and housing 1.0% of remaining value
Diesel fuel $2.75 per gallon
Lubrication cost 10% of fuel costs
Hours of use per year 300 per year
Years of life 10 years
Labor charge $20 per hour
Labor time 1.10 times tractor hours
![Page 10: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/10.jpg)
Midwest No 2 Diesel Retail Prices AnnualTax is $0.244 per gallon
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
On road
Off road
![Page 11: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/11.jpg)
How much fall applied nitrogen occur compared to normal?oMore than normal
o About the same as normal
o Less than normal
![Page 12: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/12.jpg)
Machinery Cost Estimates 2021
![Page 13: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/13.jpg)
![Page 14: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/14.jpg)
Tractor List Price
$123,749 $130,866
$166,389 $174,296$190,807
$201,342 $211,839
$290,880$302,785
$314,690
$408,408$422,601
$447,479$421,815
$453,101
$489,125
$549,435
$590,886
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
85 95 110 120 140 155 175 205 225 240 260 285 310 390 440 490 590 640Tractor PTO Hp
![Page 15: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/15.jpg)
Tractor Fuel Use per Hour
3.7 4.2 4.8 5.36.1 6.8
7.79.0
9.9 10.511.4
12.513.6
17.1
19.3
21.5
25.9
28.0
0
5
10
15
20
25
30
85 95 110 120 140 155 175 205 225 240 260 285 310 390 440 490 590 640Tractor PTO Hp
![Page 16: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/16.jpg)
Estimated Tractor Cost per Hour
$35 $37 $47 $49 $54 $57 $60$82 $85 $89
$115 $119 $126 $119 $128 $138$155 $167
$11 $13$15 $16 $19 $21 $23
$27 $30 $32
$34 $38$41 $52
$58$65
$78$85
$22 $22$22 $22 $22 $22 $22
$22 $22 $22
$22 $22$22 $22
$22$22
$22$22
$68 $72$84 $87 $94 $99 $105
$131 $137 $143
$172 $179$189 $193
$208$225
$255$273
$0
$50
$100
$150
$200
$250
$300
85 95 110 120 140 155 175 205 225 240 260 285 310 390 440 490 590 640Tractor PTO Hp
LaborFuelOverhead
![Page 17: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/17.jpg)
The Right Tractor for the Right Job205 Hp Tractor Recommended
-$37-$32
-$26
$6$11
$40$48
$58 $61
$77
-$40
-$20
$0
$20
$40
$60
$80
140 155 175 205 225 240 260 285 310 390 440
Cost
per
Hou
r Diff
eren
ce
$131/hr
Tractor PTO Hp
![Page 18: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/18.jpg)
![Page 19: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/19.jpg)
Field Operations per Acre CostsTotal
TractorOverhead
ImplementOverhead
Fuel& Lube Labor
Fuel Use(Gallons) Size
Chisel plow $13.60 $6.00 $4.60 $2.00 $1.00 0.7 35 ftDisk ripper (disk, chisel, rolling bk) $27.70 $9.00 $10.90 $6.10 $1.70 2.0 22 ftCombination ripper $29.10 $9.40 $11.60 $6.40 $1.70 2.1 18 ftVertical tillage, rolling basket $13.20 $4.40 $6.60 $1.40 $0.80 0.5 30.67 ftMoldboard plow $40.30 $17.40 $12.50 $5.70 $4.70 1.9 7 bottomMulch tiller (disk, chisel) $21.60 $10.10 $5.50 $3.30 $2.70 1.1 16 footOffset disk $18.80 $8.50 $5.20 $2.80 $2.30 0.9 16 footStrip tillage $17.30 $5.10 $8.80 $2.50 $0.90 0.8 16 rowV-ripper (shanks only) $23.40 $13.80 $2.70 $4.50 $2.40 1.5 18 footField cultivator $11.10 $3.70 $5.10 $1.60 $0.70 0.5 48.5 footMulch finisher (disk, chisel, drag) $16.60 $5.50 $8.30 $1.80 $1.00 0.6 38 footTandem disk $13.70 $4.40 $6.60 $1.60 $1.10 0.5 33.6 footHigh performance disk $14.30 $4.00 $6.60 $3.00 $0.70 1.0 30 foot
![Page 20: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/20.jpg)
Field Operations per Acre CostsTotal
TractorOverhead
ImplementOverhead
Fuel& Lube Labor
Fuel Use(Gallons) Size
Broadcast seeding 9.10 4.30 0.70 1.40 2.70 0.5 20 foot
Conventional planter 17.20 4.00 10.80 1.30 1.10 0.4 16 row
Split-row planter1 14.90 4.20 8.10 1.50 1.10 0.5 16 row
No-till planter 19.00 4.20 12.20 1.50 1.10 0.5 16 row
Grain drill 15.40 4.60 7.30 1.60 1.90 0.5 25 foot
No-till drill 27.20 7.70 13.80 2.60 3.10 0.9 15 foot
Air Seeder 18.10 5.60 9.70 1.80 1.00 0.6 44 foot
![Page 21: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/21.jpg)
Field Operations per Acre CostsSpraying and ammonia application
TotalTractor
OverheadImplementOverhead
Fuel& Lube Labor
Fuel Use(Gallons) Size
Self-propelled 4.50 4.20 0.10 0.20 0.0 120’ boom
Pull-type 4.60 0.70 3.20 0.30 0.40 0.1 90’ boom
Anhydrous ammonia 17.10 5.20 9.30 1.60 1.00 0.5 47.5 ft
Liquid Fertilizer Applicator 7.70 2.60 3.50 0.90 0.70 0.3 40 ft
![Page 22: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/22.jpg)
![Page 23: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/23.jpg)
Harvesting Costs
Corn Soybeans Notes
Combining $38.50 per acre
$33.40 per acre
Based on a 470 HP combine used on 2,500 acres.
Grain Cart $15.10 per acre
$8.40 per acre
Based on a $68,300 grain cart used on 1,900 acres.
Grain Hauling $0.10 per bu.Hauling costs from field to storage will vary depending on distance to storage, unloading time, and other factors.
![Page 24: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/24.jpg)
![Page 25: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/25.jpg)
Baling Hay Costs per Acre
Type Costs per bale50 lb. square bale $0.32
1,000 lb square bale $7.001,000 lb. round bale $8.20
TotalTractor
OverheadImplementOverhead
Fuel& Lube Labor
Small Square Baler $31.50 $11.30 $8.10 $5.40 $6.70
1,000 lb. Square Baler $28.90 $6.50 $16.60 $3.30 $2.50
Round Baler $28.90 $10.40 $7.30 $5.00 $6.20
![Page 26: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/26.jpg)
Have you used the Machinery Cost Operation in the past?o Yes
o No
![Page 27: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/27.jpg)
Comparison of Costs, 2019 to 2021
![Page 28: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/28.jpg)
Comparison of cost in 2019 and 2021Conventional Planter in $ per acre
$14.40
$2.80
$9.70
$0.90 $1.00
$17.20
$4.00
$10.80
$1.30 $1.10
$0
$5
$10
$15
$20
Total TractorOverhead
ImplementOverhead
Fuel & Lube Labor
List Prices (16-rows)2019: $134,5022021: $157,182
16% increase
Fuel Use 0.3 gallon
![Page 29: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/29.jpg)
Estimated Costs and List Prices for Select Machines and Operations in 2019 and 2021
https://farmdocdaily.illinois.edu/2021/10/machinery-cost-estimates-for-2021.html
Estimated Costs List Prices2019 2021 Change 2019 2021 Change
In $ per hour120 PTO HP Tractor $83.80 $87.00 3.8% $161,538 $174,296 7.9%225 PTO HP Tractor $130.30 $137.10 5.2% $274,867 $302,785 10.2%310 PTO HP Tractor $181.10 $189.20 4.5% $410,256 $447,479 9.1%590 Engine HP Tractor 1 $237.70 $255.00 7.3% $487,819 $549,435 12.6%
In $ per acreCombining - Corn2 $37.60 $38.50 2.4% $642,250 $687,500 7.0%Combining - Soybeans2 $32.70 $33.40 2.1% $577,750 $619,000 7.1%Chisel Plow 3 $12.70 $13.60 7.1% $63,890 $68,114 6.6%Conventional planter3 $14.40 $17.20 19.4% $134,502 $157,182 16.9%1 This was a 570 horsepower tractor in 20192 List price includes the separator and the head.3 List prices are only for the field implements.
![Page 30: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/30.jpg)
When will supply chains get back to normal?o 2022
o 2023
o 2024 to 2025
oWe have reached a new normal
![Page 31: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/31.jpg)
Management Advice
![Page 32: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/32.jpg)
$0
$100
$200
$300
$400
$500
$600
$700
$800
500 1,500 2,500 3,500 4,500 5,500
Average Machinery Values FBFM Grain Farms
• Match machinery compliment size to acres• More acres reduces overhead costs per acre
Machinery value per acre
Total Acres Farmed
![Page 33: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/33.jpg)
Conventional Planter Cost per Acre EconomicsBased on using 70 hours with Field Efficiency of 70%
$6.40 $5.30 $3.90 $4.00 $2.90 $2.80 $2.80
$8.30 $8.30 $11.30 $10.80 $11.10 $14.80 $14.20
$2.10
$1.80
$1.50$1.30
$1.00
$0.80$0.90
$2.90
$2.20$1.40
$1.10
$0.70
$0.50$0.50
$19.70
$17.60 $18.10$17.20
$15.70
$18.90 $18.40
$0
$5
$10
$15
$20
6-row/120 HP7.6
8-row/140 HP10.2
12-row/175 HP15.3
16-row/205 HP20.4
24-row/240 HP30.5
32-row/260 HP40.7
36-row/310 HP45.8
Tractor
Planter
FuelLabor
Planter/TractorAcres/hour
![Page 34: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/34.jpg)
Conventional Planter Economics as a Percent of TotalBased on using 70 hours with Field Efficiency of 70%
32% 30% 22% 23% 18% 15% 15%
42% 47% 62% 63% 71% 78% 77%
11%10%
8% 8%6%
4% 5%15% 13%8% 6% 4% 3% 3%
0%
25%
50%
75%
100%
6-row/120 HP7.6
8-row/140 HP10.2
12-row/175 HP15.3
16-row/205 HP20.4
24-row/240 HP30.5
32-row/260 HP40.7
36-row/310 HP45.8
Tractor
Planter
FuelLabor
Planter/TractorAcres/hour
![Page 35: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/35.jpg)
![Page 36: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/36.jpg)
Combine Cost Per AcreWeighted 60% Corn 40% Soybeans
$99
$77
$63$55
$49$44 $41 $39
$124
$95
$78
$67$59
$53$48
$45
$129
$98
$80
$68$59
$53$48
$44
$0
$20
$40
$60
$80
$100
$120
$140
600 800 1,000 1,200 1,400 1,600 1,800 2,000
320 hp combine8-row corn head30' grain head
470 hp combine12-row corn head35' grain head
540 hp combine16-row corn head35' grain head
Total Acres (60% corn and 40% soybeans)
![Page 37: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/37.jpg)
Combine Cost Per Acre
$0
$20
$40
$60
$80
$100
$120
$140
600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600
320 hp combine8-row corn head30' grain head
470 hp combine12-row corn head35' grain head
540 hp combine16-row corn head35' grain head
Total Acres (60% corn and 40% soybeans)
![Page 38: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/38.jpg)
470 hp combine12-row corn head35' grain head
Hours to Combine
40
80
120
160
200
240
280
320
360
600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600
320 hp combine8-row corn head30' grain head
540 hp combine16-row corn head35' grain head
Total Acres (60% corn and 40% soybeans)
Hour
s
![Page 39: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/39.jpg)
Summary•Costs have increased (list prices, fuel, labor)
•Cost estimates include all economic costs but no profit included
• Important to match machinery compliment size with acres
•More acres will reduce overhead costs
![Page 40: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/40.jpg)
farmdoc Sponsors
![Page 41: Machinery Costs and Management](https://reader030.fdocuments.net/reader030/viewer/2022012714/61ad1e7fcf8ab873e8635b07/html5/thumbnails/41.jpg)
For the webinar archives and 5-minute farmdocSubscribe to our channel YouTube.com/farmdocVideo
. I l l inois .edu
Thank You for joining us!Please submit your questions
Visit us at