By Doug Graves
COLUMBUS, Ohio – Tired of taking on increasingly high cash rents? Do you have the labor and machinery capacity to farm more acres, but don’t want to lease more land? If so, consider the possibility of selling your services as a custom farmer.
With custom farming, the operator agrees to perform all the machine operations on the owner’s land in exchange for a set fee or rate. This option is appealing for tasks requiring specialized equipment or technical expertise. Oftentimes, having someone else with specialized tools perform tasks is more cost effective and saves time. Farm work completed by others is referred to as “custom farm work” or simply, “custom work.”
According to Barry Ward, leader for production business management and director of Ohio State University’s Income Tax School for OSU Extension, custom farming is ideal for farmers who have excess machinery capacity but don’t have additional ground to farm. These established farmers, he said, can increase their income.
“If you’re thinking about what you can do to add income, custom farming would be as good a way as I can think of if you have the machinery and time to do it,” Ward said. “This type of sharing of farm work began when people first began farming. Long ago there was this sharing neighbor-to-neighbor.”
While many individuals take on custom farming, Ward added that there are full-scale businesses that offer some kind of customer farming services.
“The ones that come to mind and are the most common are those in the Plains states,” Ward said. “Come harvest time, there are big companies that converge on these fields with dozens of combines ready to harvest large fields for private owners. Those huge companies start their harvesting in the South and work their way up through the northern Plains. But we have a lot of small-scale operators here in the Midwest.”
Each year, Ohio State University Extension issues an Ohio Farm Custom Rates bulletin. Listed are estimated costs for services performed such as soil preparation, fertilizer application, aerial application, conventional tillage, no-tillage, grain harvest and storage, grain hauling and baling. The custom rates are based on a statewide survey of 223 farmers, custom operators, farm managers and landowners conducted in 2022.
The data from this survey are intended to show estimated costs for specified farm operations in Ohio. Custom farmers in Ohio rely on the Ohio Farm Custom Rates bulletin as a price guideline.
For example, the estimated range in cost for the baling of large round bales (baled and net wrapped, left in the field) is $7.36 to $12.84 per bale. The variation in price can be due to such things as the type of equipment used, shape of the field or the skill of the labor.
As another example, the custom rate cost to haul grain from farm to market averages 18 cents per bushel (with a minimum of 3 cents per bushel) to as much as 49 cents, depending in various factors as mentioned in the example above.
As a custom provider, the average rates reported in this publication may not cover your total costs for performing the custom service. As a customer, you may not be able to hire a custom service for the average rate published in this factsheet. The bulletin is a guideline for both parties involved.
“Grain hauling and harvesting are the most common type of custom work done here in Ohio. The Eastern Corn Belt is where you find custom work by means of grain hauling, harvesting and planting.”
And the cost for this service? It varies, Ward said.
“It really depends on the region,” he said. “In some cases, there are more people providing this service and that cost might be a little lower. Some of it has to do with the nature of the relationships. For instance, it might be a close neighbor that needs the help, or someone you attend church with. These people will offer you a better deal. Some of it has to do with the size of the equipment. Perhaps a neighbor has bigger equipment and that equipment can cover more acreage per hour. That would make your cost much lower.”
To download a copy of the Ohio Farm Custom Rates go to https://farmoffice.osu.edu/blog/mon-07182022-937am/ohio-farm-custom-rates-2022.