U of I Issues Machinery Cost Estimates
Every two years, the costs of machinery operations are calculated by the University of Illinois at Urbana-Champaign. The 2012 costs now are available under the “Machinery Costs” link at farmdoc.illinois.edu under the Management section.
Overall, costs have increased by about 15% between 2010 and 2012. Combine costs have declined between 2010 and 2012 because acres covered with the combine are assumed to increase in 2012.
Table 1 shows per acre costs for 2010 and 2012 for selected operations. As can be seen, chisel plowing costs increase from $12.80 per acre in 2010 up to $14.50 per acre in 2012, an increase of 13%. Field cultivating costs increase by 11% (from $8.80 per acre to $9.80 per acre) and planting costs increase by 14% (from $11.10 per acre up to $12.70 per acre).
Several factors influenced machinery cost changes between 2010 and 2012. Machinery prices have increased: Prices of new machinery have increased for most machines between 2010 and 2012. For example, the list price of a 215 horsepower tractor in 2012 is $215,000. A comparable sized tractor in 2010 had a list price of $181,500. Between 2010 and 2012, the price of this tractor has increased by 18%. The impact of price increases is to increase machinery costs.
Interest rates have declined: When calculating 2010 costs, a 6% interest rate is used. A 5% interest rate is used in calculating 2012 costs. The impact of an interest rate decline is to reduce machinery costs.
Fuel prices have increased: A $2.80 per gallon diesel fuel price is used in calculating costs in 2010. A $3.50 per gallon price is used for calculating 2012 costs. The impact of a fuel price increase is to increase machinery costs.
Labor prices have increased: A labor charge of $16 per hour is used in 2010 and a $17 per hour charge is used in 2012. The impact of the increase in labor charge was to increase machinery costs.
Combining costs are estimated at $35.80 in 2010. The 2012 cost is $33.70 per acre. Combining costs have declined because acres covered by a combine are increased. In 2010, costs are estimated using 1,400 acres were combined. In 2012, costs are estimated given that 1,900 acres were combined. Use has a large impact on all costs.