By Doug Graves
COLUMBUS, Ohio – It probably won’t come as a shock to farmers, but they’re likely to pay more for custom farm services this fall.
As input prices have shot up, so have custom farming rates across the region.
In January, Ohio State Extension released the Ohio Farm Custom Rates bulletin based on grower and custom operator surveys performed over the previous year. These surveys can be a useful reference guide for finding good custom operator rates this fall.
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.”
The Ohio Farm Custom Rates for 2022 survey is based off a statewide survey of 223 farmers, custom operators, farm managers and landowners the previous year. The rates shown below may not accurately reflect the spike in diesel prices as the approximate price of diesel fuel during the survey period rated from $4.50 to $5.25 a gallon for off-road farm usage.
Below are some harvest highlights from the 2022 Ohio survey, which can be applied to the fall harvest season. These prices are averages, and include implement and tractor (if required); all variable machinery costs such as fuel, oil, lube and twine; and labor:
• Corn: $38.80 an acre (range from $26.37 to $51.23 an acre)
• Soybeans: $37.10 an acre (range from $25.47 to $48.73 an acre)
• Wheat: $35.50 an acre (range from $24.73 to $46.27 an acre)
• Silage (chop, haul, fill): $10.50 per ton (range from $7.30 to $13.70 per ton)
• Silage (chop only): $8.20 per ton (range from $6.06 to $10.34 per ton)
Ohio State Extension recommends growers calculate their own costs before determining the custom rate to charge or pay.
“Due to the high cost of investment in farm machinery, an ever-increasing number of farm operators are hiring other farm operators to provide some or all of their machinery resources for their farm operation,” said Kent Thiesse, farm management analyst from Lake Crystal, Minn. “This is especially true with new and younger farm operators, as well as with children who decide to start farming with their parents. In addition, some land investors are choosing to operate a farm themselves rather than case-renting the land using another farm operator, thus hiring a farm operator under a custom farming agreement.”
Custom farming agreements usually include tillage, planting, some weed control, harvesting and delivering grain to a specified location. Some farm operators also hire custom work for specific farm operations with another farm operator, such as planting, combining or hay baling. Many farm operators negotiate these types of custom rates and custom farming arrangements in the spring, while others wait until harvest is completed.
Every other year, OSU Extension issues an Ohio Farm Custom Rates bulletin. The next bulletin is to be released in the spring of 2024. To download a copy of the current bulletin, go to https://farmoffice.osu.edu/blog/mon-07182022-937am/ohio-farm-custom-rates-2022.