Farm Machinery Costs
Bob Sampson, Extension Communications Specialist, University
of Illinois, 217-244-0225, rsampson@uiuc.edu
Machinery costs comprise a significatnt portion of total costs
on Illinois grain farms, averaging 16 percent of total economic
costs, according to data compiled by the University of Illinois
and the Farm Business Farm Management (FBFM) Association. A U
of I Extension study provides benchmarks so farmers can see how
their machinery costs stack up in comparison to others.
"There is considerable variability in machinery costs across
farms, with more profitable farms tending to have lower per acre
machinery costs," explained Gary Schnitkey, U of I Extension
farm management specialist and author of "Benchmark Machinery
Values on Grain Farms." Schnitkey said the study allows a
farmer to compare his or her machinery values to the benchmarks
to determine whether machinery values are high or low.
"Having high or low machinery values does not necessarily
indicate that a farm has a problem with machinery costs,"
he said. "However, having either high or low machinery values
suggests that a farmer should evaluate his or her machinery practices."
Data for the benchmarks comes from farms enrolled in FBFM. To
be included, a farm had to receive a majority of revenue from
grain operations and had to have balance sheet data that included
a fair market valuation for machinery. In addition, the farm had
to receive less than $20 per operator acre from custom work. "This
criterion eliminated farms that perform a large amount of custom
work," he said. "A total of 1,682 farms meet the above
criteria and were summarized in the study." Machinery includes
all tractors, combines, planters, drills, and tillage equipment.
It also includes grain hauling equipment such as grain carts and
trucks. Machinery also includes pickups and other light duty trucks
that are used in the farm. The study includes tables showing the distribution of per acre
machinery fair market values and distribution of per acre machinery
cost values. |
