Custom rates paid by South Dakota farmers in 1962 discusses the high initial cost of farm machinery, coupled with low annual use causing farmers to turn to custom work for some of their operations and the costs involved

Eno, William

Helfinstine, Rex D.

English

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South Dakota State University Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange SDSU Extension Fact Sheets SDSU Extension 1964 Custom Rates Paid by South Dakota Farmers in 1962 Rex D. Helfinstine William Eno Follow this and additional works at: https://openprairie.sdstate.edu/extension_fact Recommended Citation Helfinstine, Rex D. and Eno, William, "Custom Rates Paid by South Dakota Farmers in 1962" (1964). SDSU Extension Fact Sheets. 1269. https://openprairie.sdstate.edu/extension_fact/1269 This Fact Sheet is brought to you for free and open access by the SDSU Extension at Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange. It has been accepted for inclusion in SDSU Extension Fact Sheets by an authorized administrator of Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange. For more information, please contact michael.biondo@sdstate.edu. Historic, archived doculllent Do not assume content reflects current scientific knowledge, policies, or practices. SDSU ® Extension For current policies and practices, contact SDSU Extension Website: extension.sdstate.edu Phone: Email: 605-688-4 792 sdsu.extension@sdstate.edu SDSU Extension is an equal opportunity provider and employer in accordance with the nondiscrimination policies of South Dakota State University, the South Dakota Board of Regents and the United States Department of Agriculture. F.S. 188 CUSTOM RATES PAID BY SOUTH DAKOTA FARMERS IN 1962 By REX D. HELFINSTINE, Extension Economist, and WILLIAM ENo, Graduate Student Published and distributed in furtherance of the Acts of Congress of May 8 and June 30, 1914, by the Cooperative Extension Service of South Dakota State College of Agriculture and Mechanic Arts, Brookings, John T. Stone, Director, and the U. S. Department of Agriculture. 12M-2-64-:-File: 3.275-886 Custom Rates Paid by South Dakota Farmers in 1962 The high initial cost of farm machinery, coupled with low annual use, has meant that many farmers have turned to custom work for some of their opera-tions. Other farmers have bought new machinery and do custom work for their neighbors to spread their fixed or overhead costs over more acres. Figures on custom rates, paid by South Dakota farmers, reported in this fact sheet were obtained from questionnaires mailed to a sample of farm operators and custom operators in the state. These rates are believed to be representative of the prices paid for work done in 1962 in the state or area. Names of operators were obtained from cooperating County Extension Agents. Specific custom rates paid by an individual farmer may vary with size of field, roughness of land, equip-ment, supplies and labor furnished, and with com-petition in a community. Some rates varied according to area of the state and are reported on the next page. Frequently a farm operator wishes to know wheth-er it would be more profitable for him to own a par -ticular machine or custom hire the work done. The number of acres, hours, or bales required to be done Table 1. Custom Rates Paid by South Dakota Farmers in 1962* Rate Most Ojeration Unit Frequent Average Range Plowing ______ acre $3.00 $3.50 $2.00-$8.00 Disking, tandem __________ acre 1.00 1.30 .75- 3.00 Drilling small grain w/o fert. acre 1.25 1.30 0.50- 2.00 Cultivating row crops __ acre 1.00 1.30 0.75- 2.50 Mowing acre 1.25 1.20 0.50- 2.75 Hay baling Square, twine __________ bale .10 .10 .07- .15 Square, wire ____________ bale .12 .13 .08- .18 Round, twine _________ bale .10 .10 .07- .13 Picking corn acre 3.00 3.80 2.50- 6.00 Picker sheller ________________ acre 5.00 5.30 3.50- 7.00 Swathing ____________________ acre 1.25 1.30 0.85- 2.50 Combining Wheatt ___________________ acre 3.50 3.60 1.50- 5.50 Flax _ acre 3.50 3.80 3.00- 6.00 Other small grain____ acre 3.50 3.50 2.50- 5.00 Sorghum _________________ acre 4.00 3.40 3.00- 5.00 Field Chopping, 2-rowt __ hour 12.00 11.70 2.00-20.00 Spraying§ Air __________ acre 1.50 1.40 1.00- 2.00 Ground acre 1.25 1.20 1.00- 2.00 Corn Shelling ___ bu. .03 .04 .02- .08 •From mail sample survey of farmers and custom operators. tFrequently an extra charge was made of 5c per bushel on the yield above 20 bushels. tWagons and blower furnished. §Including cost of 2,4-D material. Table 2. Annual Use Required for Profitable Ownership of Selected Equipment Annual Most Use Annual Frequent Annual To Be New Fixed Custom Cash Equally Machine Cost Cost* Unit Rate Costst Profitable Combine, 12' SP ________ ____ $6500 $946 Acre $ 3.50 $1.25 420 Baler, pto twine ______________ 1800 262 Bale .10 0.428 4580 Forage harvester, pto, 1-row ______ 1800 262 Hour 12.00 2.99 29 Corn picker, mounted, 2-row ____________ 2500 364 Acre 3.00 1.32 217 • Assumes 10-year life and 10% salvage value. Includes depretiation, in-terest on investment, taxes, insurance, and housing calculated at 14.55% of original cost each year (from Kan. Agr. Exp. Sta. bul 417, "What It Costs to Use Farm Machinery"). i·Assumes a life of 2000 hrs. for combine, 300 hrs. for baler, 1200 hrs. for forage harvester, and 1500 hrs. for picker; total repairs of 40% of new cost for combine and baler, and 30% of new cost for forage har-vester and corn picker; 3.7 acres per hour for combine, 100 bales per hour for baler, 1.5 acres per hour for forage harvester, and 2.3 acres per hour for picker; and operator labor cost of $1.50 per hour. per year to make it equally profitable to own or hire a machine can be calculated by dividing the annual fixed cost by the difference between the custom rate and the cash cost.1 This amount of annual use is calculated in table 2 for a combine, baler, forage harvester, and corn picker. It is recognized, however, that factors other than cost must be considered by an operator when deciding whether to own a machine or hire the work done. Some of these factors include: likely returns from using the required investment capital in other parts of the farm business, the value of timeliness in getting the work done, the quality of the work done, the ability to hire additional labor for seasonal work, the satisfaction of ownership, and the risk of obsolescence. 1 l annual fixed cost Annua use = ---- ------------,--custom rate - cash cost per acre, bale, or hour South Dakota Economic Areas. Table 3. Most Frequent Custom Rates Paid by South Dakota Farmers for Selected Operations, by Area, 1962 (From Mail Survey) 1 2a 2b 3a 3b 4a 4b West East West East West North South South South North- South-Operation Unit River Central Central Central Central east east Plowing acre 3.00 3.00 2.50 4.00 3.00 3.00 5.00 Plowing w /pony press drill ______ acre 4.00 3.00 Disking, tandem ----------------------- acre 1.00 1.00 I.SO One way _________________ acre 2.00 I.SO I.SO 2.00 Listing and fertilizin~ ___ acre I.SO Listing w /o fert. ________ acre I.SO Drilling small grain w / o fert. ____ acre 1.25 1.00 I.SO 1.00 1.25 Drilling small grain and fert.* __ acre 1.25 1.25 Planting corn w /fert.* ________________ acre I.SO 1.00 Planting corn w / o fert. acre 1.00 1.00 Cultivating row crops ________________ acre 1.00 1.00 I.SO 1.00 1.00 1.00 Mowing acre 1.25 1.25 1.00 1.25 1.00 1.00 1.00 Hay baling Square, twine bale .10 .10 .10 .10 .10 .10 Square, wire ---------------------------- bale .12 .12 .14 .12 Round, twine ____ bale .10 .10 .08 .10 .08 .08 Swathing _____________ acre 1.25 1.25 1.25 1.00 1.00 1.00 1.25 Combining Wheatt -------------------------------------- acre 3.50 3.50 3.50 4.00 4.00 3.00 4.00 Flax ______ acre 3.50 3.50 3.50 4.00 3.50 Other small grain ___________________ acre 3.50 3.50 3.50 3.50 3.50 3.00 4.00 Sorghum ______ acre 3.00 4.00 4.00 4.00 Soybeans ______________ acre 4.00 Picking corn acre 6.00 4.00 3.00 4.00 4.00 3.00 3.50 Picker-shell corn acre 5.00 5.00 4.00 5.00 6.00 Spraying§ Air acre 1.25 1.25 1.25 I.SO 1.25 Ground acre 1.25 1.00 1.00 1.25 1.00 1.00 Corn shelling No hauling __ bu. .05 .05 .04 .025 .03 .025 Haul up to 10 mi. bu. .05 .06 Stack movingll stack s.ob 5.00 5.00 6.00 6.00 6.00 7.50 Feed grinding, small grain _______ bu. .10 Sheep shearing ______ head .50 .50 .50 .50 •Fertilizer furnished by farmer. tAn extra charge of 5c per bushel generally was made on the yield above 20 bushels except in areas 4a and 46. §Includes cost of 2,4-D material. IIAn extra charge of $1.00 per mile generally was made for more than l mile, except in area 4b. 

Custom Rates Paid by South Dakota Farmers in 1962

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Custom Rates Paid by South Dakota Farmers in 1962

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